Please cite this paper as: OECD (2010), Local Employment Strategies in Romania: Vaslui and Mures Counties,

final report of the project on Optimising the Management of Local Development and Strategies for Employment in Romania, Local Economic and Employment Development Committee, OECD, Paris.

Project on Optimising the Management of Local Development and Strategies for Employment

Local Employment Strategies in Romania

VASLUI AND MURES COUNTIES

Ministry of Labour, Family and Social Protection of Romania

Acknowledgements The OECD LEED Programme would like to thank the Ministry of Labour, Family and Social Protection of Romania for its support, and all the interview partners for their collaboration. This project would not have been possible without the very valuable input of Monica Mateescu, counsellor in the Directorate for External Relations, and Cristina Mereuta, counsellor in the Employment and Wages Directorate of the Ministry of Labour, Family and Social Protection of Romania. Thanks are also extended to Valentina Paraschiv, for her excellent support during the review visit and for the survey, to Elisa Campestrin of the OECD LEED Trento Centre for Local Development, who organised the study visit and to Austin Delaney for helping with the editing of this report. The OECD LEED Programme would like to acknowledge the support of the European Commission DG Employment, Social Affairs & Equal Opportunities.

The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation for Economic Co-operation and Development, or of the governments of its member countries.

The project The Ministry of Labour, Family and Social Protection of Romania (MoLFSP) established local partnership structures to provide a solid and locally-based framework for employment development. Partnership structures exist at regional level (eight Regional Pacts) and at county level (33 County Partnerships), and are under development at municipal, town and commune level. Since the inception of these structures, significant progress has been made in the building of capacities for effective local policy delivery and local action to promote employment development. Yet, the effective organisation of employment development activities still faces barriers, related to a high degree of politicisation of the public administration and insufficient decentralisation of competencies and budget management. Major reforms are on-going in the public employment service, but progress is slowed down by the negative impact of the global economic crisis on local labour markets, revealing some of the underlying structural causes of the low unemployment low employment paradox. More needs to be done to achieve a functioning integration of economic and employment development, starting from national level policy making down local action. Establishing a local development governance system that works well requires a long-term agenda, and this has only recently been acknowledged in Romania. MoLFSP is collaborating with the OECD LEED Programme to review the current local development governance framework in the country. For the purpose of this study, the counties of Vaslui and Mures and their respective development regions were selected as cases to be examined in depth. The Sectoral Operational Programme for Human Resource Development (POSDRU) and its decentralised implementation structure constituted the main reference framework. The analysis focused on: (i) the current level of policy and strategy integration at the different tiers of government; (ii) the current role of the public employment service in employment policy processes and its capacity to steer and facilitate partnership working; and (iii) the current role and capacity of institutionalised partnership structures in designing, implementing, monitoring and evaluating a local employment strategy. This review is part of the Optimising the Management of Local Development and Strategies for Employment project, which is implemented within the 2009-2010 LEED Programme of Work [CFE/LEED(2008)4]. The project is an activity of the OECD LEED Forum on Partnerships and Local Governance, which benefits from the support of the European Commission DG Employment, Social Affairs & Equal Opportunities. The report This report presents the findings of an OECD LEED review of local governance arrangements in employment policies in Romania. The report is based on a background report, prepared by MoLFSP and meetings held during a one-week study visit from 7-11 September 2009. In addition a survey amongst partnership members was conducted from October to December 2009; the results are presented in Annex 2. The key findings and policy recommendations were presented in form of a synthesis report to MoLFSP and the interview partners for comments in October 2009. A draft version of the full report was also presented for comments in April 2010. All comments received in are reflected in this final version of the full report. The report is structured as follows. Chapter 1 provides an overview of the characteristics of the Romanian labour market and its institutions and current policy priorities. This is followed by a synthetic overview of the key findings from the review of the national framework for local employment development and the local case studies in Chapter 2. Chapters 3 to 5 present a more-indepth discussion of the current level of policy and strategy integration at the different tiers of 4

government (Chapter 3), the role of the public employment service in local employment development (Chapter 4), and the role and capacity of local partnership structures in designing, implementing, monitoring and evaluating a local employment strategy (Chapter 5). The report concludes with key conclusions and overall policy recommendations that resulted from the local case studies, but are of a wider relevance for Romania. In Annex 1 an Action Plan summarises the key policy recommendations and indicates possible actors to lead their implementation. Contributors Andrea-Rosalinde Hofer of the OECD LEED Programme managed this project, authored Chapters 2 and 6, and edited this report. Reiner Aster of gsub Berlin contributed with his longstanding expertise in designing and implementing local employment strategies to this review with learning models from Germany. He authored Chapter 4 and the Learning from good practice part in Chapter 5. Maria Joao Filgueras-Rauch has been working as senior expert on the establishment of local partnership structures in Romania since their inception. She authored Chapter 5 on the role of partnerships in local employment development and conducted the survey exercise whose results are presented in Annex 2. Andrea Vugrinovic has longstanding experience as local development insider in the Western Balkans. She authored Chapter 3 on policy and strategy integration with some useful examples of how local development governance is promoted in Croatia. The Ministry of Labour, Family and Social Protection authored Chapter 1 on characteristics of the Romanian labour market and its institutions and current policy priorities.

TABLE OF CONTENTS

Acknowledgements............................................................................................................................. 3 The project .......................................................................................................................................... 4 The report............................................................................................................................................ 4 Contributors ........................................................................................................................................ 5 CHAPTER 1 CHARACTERISTICS AND KEY POLICIES OF THE LABOUR MARKET IN ROMANIA ................................................................................................. 9 A brief presentation of the current labour situation market in Romania ............................................ 9 Current priorities of labour market policy in Romania ................................................................. 13 The implementation framework of labour market policy in Romania.............................................. 15 Current budgetary programmes ..................................................................................................... 17 Reactions to the labour market impact of the economic crisis ...................................................... 18 Monitoring and evaluation structures............................................................................................ 18 Local implementation of labour market policy ............................................................................. 20 CHAPTER 2 KEY FINDINGS FROM THE REVIEW ................................................................. 22 Policy and strategy integration at different tiers of government ....................................................... 22 The public employment service ........................................................................................................ 23 Institutionalised partnership structures ............................................................................................. 25 CHAPTER 3 INTEGRATION BETWEEN ECONOMIC AND EMPLOYMENT DEVELOPMENT ...................................................................................... 27 Organising for strategy integration ................................................................................................... 27 Top-down approach in planning for change ................................................................................. 27 On the way of building local synergies ......................................................................................... 28 Conceptualising strategy integration ................................................................................................ 29 Focusing on infrastructure development ....................................................................................... 30 Local development between two chairs - convergence and competitiveness .......................... 30 Issues around capacity for strategy integration at the local level ..................................................... 32 Overlapping strategies ................................................................................................................... 33 Institutional performance and collaboration with externals .......................................................... 33 Understanding EU procedures ...................................................................................................... 34 Project-work integration................................................................................................................ 35 POSDRU organisation .................................................................................................................. 35 Partnerships and strategy integration ............................................................................................ 36 Creating and using local evidence .................................................................................................... 37 Lack of local data .......................................................................................................................... 38 Objectives and priorities setting .................................................................................................... 38 CHAPTER 4 LOCAL EMPLOYMENT STRATEGIES AND THE PUBLIC EMPLOYMENT SERVICE.............................................................................................. 40 Introduction....................................................................................................................................... 40 Challenges and opportunities with regard to local employment strategies ....................................... 41 6

National context ............................................................................................................................ 41 Local context ................................................................................................................................. 42 Main local labour market challenges ............................................................................................ 43 Modernisation and capacity development issues concerning the public employment service ..... 44 Partnering for local employment ................................................................................................... 46 Learning models ............................................................................................................................... 48 Short-term work and transfer-short-term work scheme combined with further training .............. 49 Perspective 50plus: Employment Pacts for older long-term unemployed in the regions .......... 51 Job Point. The direct way to your new job.................................................................................... 54 CHAPTER 5 PARTNERSHIP STRUCTURES FOR EMPLOYMENT DEVELOPMENT ...... 57 Introduction....................................................................................................................................... 57 Local governance in the design, implementation and evaluation of employment strategies ............ 58 Regional Consortia ........................................................................................................................ 59 Regional Pacts for Employment and Social Inclusion .................................................................. 59 Regional Plans for Employment and Social Inclusion .................................................................. 62 The role of local partnerships in employment development ............................................................. 63 Strengths and Challenges .............................................................................................................. 63 Key issues ..................................................................................................................................... 65 Learning from good practice: Local partnerships unlocking local potential for the economy and employment in Berlin ....................................................................................................................... 70 CHAPTER 6 CONCLUSIONS AND POLICY RECOMMENDATIONS ................................... 78 Policy and strategy integration for local economic and employment development ......................... 78 The role of the public employment service in local economic and employment development ........ 79 The role of local partnerships in local economic and employment development ............................. 80 ANNEX 1 ACTION PLAN ................................................................................................................. 82 ANNEX 2 SURVEY OF LOCAL PARTNERSHIPS IN ROMANIA ................................................ 86 ANNEX 3 LIST OF PARTICIPANTS IN REGIONAL ROUND TABLES ...................................... 93 Tables Table 1. Table 2. Table 3. Table 4. Table 5. Table 6. Figures Figure 1. Figure 2. Figure 3. Figure 4. Figure 5. Figure 6. Figure 7. Dynamics of urban and rural employment rates (15-64 years) ...................................... 10 Change of total registered unemployment rate over calendar years (2008, 2009) ......... 12 Overview of current active labour market measures in Romania .................................. 16 Priority Axes and Budget allocation POSDRU (2007-2013) ......................................... 17 Job point advantages for employers, jobseekers and the public employment agencies . 56 Partnership structures at NUTS 2, 3 and 4+levels .......................................................... 62 Key steps in successful local partnership working ......................................................... 75 Employment rates per different groups Romania and EU 2010 targets ........................... 9 Evolution of employment rate during 2002-2010 (15-64 years) .................................... 10 Employment rates by gender and age groups (2002-2008 ............................................. 11 Employment rates of active population per gender, urban-rural and region (Q1 2009). 11 Characteristics of the labour force in the different Romanian regions (Q1, 2009) ........ 12 Employment rates of older employees 2003 and 2008, Germany - Romania ................ 51

Boxes Box 1. Organising stakeholder involvement in local integrated planning ........................................ 29 Box 2. Towards the development of high-value-added economy in the county of Varazdin .......... 32 Box 3. Facilitating participation and trust development in regional planning efforts ..................... 33 Box 4. Collaboration to increase the impact of employment measures ........................................... 34 Box 5. Streamlining project application requirements .................................................................... 35 Box 6. Fee agreement to stimulate project-work integration ........................................................... 35 Box 7. Towards developing indicators needed for strategic planning at county level .................... 38

CHAPTER 1 CHARACTERISTICS AND KEY POLICIES OF THE LABOUR MARKET IN ROMANIA

A brief presentation of the current labour situation market in Romania Since the early 1990s the transition to a market economy has strongly influenced Romanias labour market both in terms of its volume and structure. There has been a decrease in the active population and the employed population, increasing unemployment, early retirement, a loss of jobs and very little capacity to create new ones. Harshening social conditions and increased migration caused a constant decrease of population and the active labour force. Migration for work purposes has become an attractive option and is sustained through a series of agreements on the movement of the labour force within the European Union and the European Economic Area and a progressive elimination of barriers to the free movement of the Romanian workers that were imposed by some EU Member states after the countrys accession to the European Union. In the period 2002-2008, the National Agency for Employment facilitated the conclusion of approximately 240 000 labour contracts, for Romanians to work both in countries that have concluded bilateral agreements with Romania and in other countries, mainly in agriculture and construction sectors. In the period 20022008, the National Agency for Employment facilitated the conclusion of approximately 240 000 labour contracts, for Romanians to work both in countries that have concluded bilateral agreements with Romania and in other countries, with which the collaboration was direct, mainly in agriculture and construction sectors. In 2007, the number of Romanian citizens, who benefited from labour mediation and the conclusion of individual employment contracts with foreign employers through employment agents1, was 26% higher than in 2006. The labour market in Romania is characterised by a relatively high inactivity rate, high rate of unemployment amongst the young (15-24 years) and a significant rate of employment in the agricultural sector, which is characterised by informal work. With regard Lisbon Strategy, Romania still lags behind the EU 2010 target (Table 1), mainly because of the above mentioned reasons.
Table 1. Employment rates per different groups Romania and EU 2010 targets Romania 2008 (15-64 years) 59% 52,5% 43,1% EU 2010 (target) 70% 60% 50%

Employment rate per group Total employment rate Employment rate women Rate of elderly employment (55-67 years)

Source : National Institute of Statistics Households labour force survey (AMIGO).

Nevertheless important and difficult steps were made in the structural change process, which together with constant rates of economic growth, resulted in a positive development of specific labour market indicators. The period 2006-2008 maintained a higher employment rate for the age group 1564 as compared to the period 2002-2005. In 2009 provisional data show another decrease of 0.3 percentage points, which is to be attributed to the impact of the global economic crisis on Romania.
1

Employment agents are registered companies whose main activity is listed as activities of employment agencies " and who are registered at Territorial Labour Inspectorates.

Table 2. 2002 58,0

Evolution of employment rates during 2002-2010 (15-64 years) 2003 57,8 2004 57,9 2005 57,7 2006 58,8 2007 58,8 2008 59,0 2009* 58,7

Employment rate (15-64 years)

Source : INS for 2002 2009; * provisional data.

International labour migration is not the only phenomenon having an impact on Romanias local labour markets. During 1990s, there was a clear tendency of urban population moving to rural areas and resorting to agriculture as last-instance employer, which led to higher employment rates in rural than in urban areas that still persist nowadays (Figure 1).

Figure 1. Dynamics of urban and rural employment rates (15-64 years)

80
70 60 50 40 30 72,7 73,5

72,8
63,7 62,9 60,6 55,9 61,6 55 61,1 57,2 61,5 56,8

56,7

55,8

55,3

53,7

54

Urban
Rural

20
10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source : National Institute of Statistics (AMIGO).

A significant difference in employment rates of men and women is constantly registered in the past 7 years. In 2008, 13.2% more men than women have been in employment. One reasons for this is lower statutory age for retirement. Women retire at the age of 58 years and 8 months, compared to 63 years and 8 months for men (in September 2009). According to the results of the household level labour force survey AMIGO, for the 1st quarter of 2009, women represented 60.6% of the total inactive population over 15 years old; 24.5% of which were housewives. The economic sectors with high share of female employment are the public sector with 68.6% in public administration, 81.4% in health and social assistance and 75.2% in education, services and trade (65%), in particular financial intermediations and insurance (68.2%), and hotels and restaurants (60.1%).

10

Table 3.

Employment rates by gender and age groups (2002-2008

Age: 15-24 F 52.0 51.5 52.1 51.5 53.0 52.8 52.5 Total 30.5 27.9 29.1 25.6 24.0 24.4 24.8 M 34.6 32.6 32.8 29.4 27.3 28.3 29.1 F 26.2 22.9 25.1 21.6 20.6 20.2 20.2 Age: 25-54 Total 72.8 73.1 72.9 73.3 74.7 74.6 74.4 M 79.6 80.1 79.2 80.0 80.8 80.6 80.9 F 66.0 66.0 66.6 66.5 68.6 68.5 67.8 Total 37.7 38.1 36.9 39.4 41.7 41.4 43.1 Age: 55-64 M 43.1 43.5 43.1 46.7 50.0 50.3 53.0 F 33.0 33.3 31.4 33.1 34.5 33.6 34.4

Age: 15-64 Year Total 2002 2003 2004 2005 2006 2007 2008 58.0 57.8 57.9 57.7 58.8 58.8 59.0 M 64.1 64.1 63.6 63.9 64.6 64.8 65.7

Source : National Institute of Statistics (AMIGO).

Employment rates show differences across the countrys eight development regions (Table 4). North East with 17.3% and South Muntenia with 15.3% have the highest shares of employed population whereas West has only 8.9%. The economic dependency ratio (number of inactive persons and unemployed at 1000 employed persons) registers its highest value in the North-West region (1612) and the lowest in Bucharest (1111). At national level, the value was 1378, higher for women (1729).
Table 4. Region Employment rates of active population per gender, urban-rural and region (Q1 2009) Regional distribution of employed population Employment rate total Employment rate women Employment rate men Employment rate rural Employment rate urban

NorthWest Centre North-East SouthEast South Muntenia BucharestIlfov SouthWest West

Regional distribution of population (>15 years), in thousands 2292 2133 3065 2405 2807 1949 1939 1645

11,5% 11,1% 17,3% 12,5% 15,3% 11,7% 11,7% 8,9%

52,4 55,4 57,0 55,0 57,7 64,6 61,1 57,8

46,6 49,1 52,4 46,7 47,8 58,6 55,5 51,4

58,2 61,8 61,5 63,3 67,8 71,2 66,6 64,3

47,3 50,5 63,2 54,6 58,4 59,9 67,9 58,3

56,4 58,4 50,2 55,3 56,9 65,0 54,9 56,8

Source : National Institute of Statistics AMIGO.

Also in terms of levels of educational attainment and economic structure there are differences between the regions (Table 5). The region Bucharest-Ilfov has with 32.9%the highest proportion of graduates with tertiary education amongst the employed population, whereas in South-Muntenia only 10.3% of the total employed population has completed tertiary education. In the region North-East one third of the employed population has only accomplished primary education. Agriculture employs in 11

this region almost half of the population, similar to the South-West region. Industry remains an important employer for almost, or more than, one-third of the employed population in five out eight regions. The service sector is strong in Bucharest-Ilfov where the highest proportion of population is employed in the services sector, registering a significant advance compared to the other regions. The next region in this classification is South-East (43.5%). The lowest proportion is registered in SouthWest Oltenia (30.2%).
Table 5. Characteristics of the labour force in the different Romanian regions (Q1, 2009)
Region Regional distribution of employed population Distribution on age groups Distribution on level of education Distribution of employed population on economic sectors

NorthWest Centre NorthEast SouthEast South Muntenia Bucharest -Ilfov SouthWest West

11.5% 11.1% 17.3% 12.5% 15.3% 11.7% 11.7% 8.9%

15-24 years 14.1 11.3 20.8 13.7 16.9 8.8 22.8 11.7

2554 years 78.7 80.5 70.4 77.1 73.8 85.4 68.8 80.4

>55 Superior* years 7.2 14.7 8.2 8.8 9.2 9.3 5.8 8.4 7.9 15.0 11.9 12.1 10.3 32.9 13.6 16.3

Medium** 63.0 69.5 53.9 61.5 62.4 59.4 55.3 66.5

Low*** 22.3 15.5 34.2 26.4 27.3 7.7 31.1 17.2

Agriculture 21.9 15.3 46.4 25.7 30.0 1.8 46.0 16.8

Industry Services construction 36.0 42.1 41.9 20.8 30.8 34.7 27.1 23.8 42.7 42.8 32.8 43.5 35.3 71.1 30.2 40.5

Source : National Institute of Statistics AMIGO * Superior = tertiary education: long duration (including MA, PhD); short duration (colleagues). ** Medium = secondary vocational post-high school or technical foreman, high school (including secondary school stage I), professional, complementary or apprenticeship. *** Low = secondary, primary school, no completed formal education.

The economic crisis had an important impact on the registered unemployment rate. In the period 2002-2007, registered unemployment did not show significant fluctuations but a constant decrease, the trend being of attenuation and flattening during the whole period of reference. However, starting at the end of year 2008, the registered unemployment rate shows an increasing trend, more emphasised in 2009 (Figure 2).
Figure 2. Change of total registered unemployment rate over calendar years (2008, 2009)

10 8 6 4,9 4 2 0 ian feb m ar apr m ai iun iul aug sep oct nov dec 4,2 4,2 4,1 3,9 3,7 3,7 3,7 3,8 3,9 4 4,1 4,4 5,3 5,6 5,7 5,8 6 6,3 6,6 6,9 7,1 7,5 7,8 2008 2009

Source : National Employment Agency.

12

During 2009, the number of registered unemployed receiving benefits has exceeded the number of unemployed that do not receive unemployment benefits, a situation which has not occurred since July 2002. In the end of 2009, the registered unemployment rate reached 7.8%, being by 3.4 percentage points higher than in December 2008. Most of the unemployed were made redundant from the private sector. Current priorities of labour market policy in Romania A key priority of the Romanian labour market policy is achieving the European targets set out in the (re-launched Lisbon Strategy), paying special attention to raise labour market participation and promote quality employment. To this end, the following overall objectives were set: Ensuring the functioning of the labour market as to be favourable for job creation and reducing non-declared work, and for a management fit for changes at the level of companies and individual workers. Improving labour market access for vulnerable groups. Promoting competitiveness through better linkages between education, training and market requirements.

MoLFSP sets the following objectives and implementation measures as medium term priorities: To improve the legal framework necessary for designing, implementing, monitoring and assessing employment policies, programmes and strategies by: Modifying the law on the unemployment insurance system and stimulating employment, with its subsequent adjustments (simplifying and making flexible the way of implementing measures for stimulating employment). Modifying the law on apprenticeship at work to raise the attractiveness of this pathway for vocational training and employment and to simplify the legal provisions for companies to take on apprentices. Modifying the legal framework on continuous vocational training to take into account changing labour market current conditions and needs).2 To assure effective implementation of active employment measures and continuous vocational training by: Activation of vulnerable groups and increased labour market insertion actions. Adjusting vocational training activities according to labour market requirements and considering the dynamics of social and economic changes. Conducting research into current and future labour and skills needs of companies (short, medium and long term projections of the demand for skills and qualifications);

This is still at its very beginning.

13

 Intensifying the information activity and career counselling for persons in rural areas and those belonging to vulnerable groups who currently are not in employment with the aim to increase participation in vocational training. Intensifying the offer and take up of vocational training programmes for young people. Establishing a framework to assess and certify skills acquired in informal or nonformal contexts for the unemployed, in particular for people belonging to vulnerable groups. Establishing regional and local training centres belonging to the county employment agencies (CEAs). To enhance the legal and institutional framework for labour force mobility by: Elaborating the law on labour force migration in order to develop the legal and the institutional framework for labour force mobility. The law shall provide flexibility in granting work permits, constitute the legal framework for labour mobility outside the European Union, improve collaboration with international employment agencies for job placements overseas, and ensure employers responsibility for hired foreign workers. Continuing information campaigns on employment opportunities for Romanian citizens abroad; Active participation in international working groups on agreements and protocols with other states outside the European Union. The Romanian government has prepared a number of strategic and programmatic documents with regard to labour market policy. For the current period these are: The Government Programme for the period 2009-2012; The National Reform Programme for the period 2007-2010 and its action plans; The National Strategy for Employment for the period 2004-2010; The Short and Medium Term Strategy for Continuous Professional Training for the period 2005 2010; The Sectoral Operational Programme Human Resources Development for the period 20072013 (POSDRU).

Of particular importance for human capital development through education and lifelong learning opportunities is POSDRU which is under the responsibility of MoLFSP. The ministry functions as the Managing Authority for POSDRU, having responsibility for the management and implementation of financial assistance non reimbursable, allocated from the European Social Fund to this program for the programming period 2007-2013. POSDRU sets the priority axes and key areas of intervention following the overall objective of human capital development and competitiveness, by linking education and lifelong learning to labour market requirements in order to provide enhanced opportunities for future participation in a modern, flexible and inclusive labour market. Specific POSDRU objectives include: 14

Promoting quality of education and initial and continuing vocational training, including higher education and research; Promoting entrepreneurial culture and improving labour quality and productivity. Facilitating the inclusion of young and long-term unemployed into the labour market. Developing a modern labour market, flexible and inclusive. Promoting reinsertion in the labour market of inactive people, including in rural areas. Improving the public employment services. Improving access to education and employment of vulnerable groups.

The implementation framework of labour market policy in Romania The National Agency for Employment (NAE) is the main agency responsible for the implementation of strategies, policies, and specific plans and programmes related to labour force development and employment. NAE develops every year an Employment Programme, structured according to target groups (categories of persons who are looking for a job) and types of active measures, as well as Training Plans structured according to categories of vocational training programmes, occupations and target groups (persons who are looking for a job, want return to employment after having benefited from invalidity pension or a period of child care, ex-prisoners persons, etc.). For accomplishing the priorities mentioned in the Government Programme for the period 20092012, NAE has determined the following main objectives: Better matching offer and demand for labour. Active and preventive measures for unemployed, for persons not performing an economic activity, as well as for the persons who are at risk losing their jobs. A reduction of long-term unemployment by providing employment opportunities for young people within six months after registration date and twelve months for people older than 25 years through vocational training, retraining, providing jobs or other measures (including career orientation). Increased labour market participation of elderly by lengthening the active life of people aged 50 years and older by including them into active measures. Enhanced employment amongst people belonging to vulnerable groups by including them in the active measures and ensuring other specific support forms. Increased offer and take up of vocational training with a balanced representation of ruralurban residence, age and educational attainment level of participants. Increased offer of vocational training in rural areas. Increased support for employers in hiring the unemployed.

A broad active labour market policy package is currently implemented by NAE and its local branches (Figure 3). 15

Figure 3. Overview of current active labour market measures in Romania Measure Description A. Measures to increase the employment opportunities for jobseekers Mediation services for reported Developing personalised relationships vacancies or new jobs with the employers, focusing on the quality of selections and staff repartitions according to the job requirements Career information and counselling Information on local labour market services for job-seekers development and occupations. Skills assessment and self-assessment for vocational orientation, developing skills and self-confidence of job seekers, assistance in the methods and techniques for searching a job Vocational training Implementing training courses (initial, training, retraining, upgrading and specialisation level) correlated to current and perspective demand on labour market and in accordance to individual options and aptitudes Target group All registered jobseekers

All registered jobseekers

Counselling and assistance for business start-up or self-employment

Raising the employment level by means of starting a business, providing counselling and assistance for starting an independent activity or a business Rapid transition to employment and Allowances for unemployed who find reduce long-term unemployment a job before the unemployment benefit expires Stimulating labour force mobility Granting incentives for employment or relocation for those unemployed who take-up a job situated over 50km distance from residence or who changes the residence to another town for employment purpose B. Measures to stimulate employers to hire unemployed Reduce unemployment of people with Incentives for the employers for hiring special needs and lengthening the persons over 45 years, single family active life of persons with difficulties earner or persons who have 3 years to re-integrate until retirement, disabled persons Youth employment Stimulating employers to hire graduates; providing a quality vocational counselling for youth Social inclusion Solidarity contracts for youth at risk to become socially marginalised by personalised support services. Incentives for employers to hire persons belonging to this category Temporary employment in local Subsidizing the expenses related to development works the labour force for temporary employment in local development works Providing loans to start-up a business Stimulating job creation by setting-up with advantageous interest rate or development SMEs, cooperatives, family associations and independent activities (leading to entrepreneurial development, reduction in the regional differences and boosting SMEs

All registered jobseekers, inactive or self-employed persons from rural area, detainees (within 9 months before release), people returning to employment after invalidity benefit or child care break. All jobseekers, Students

All jobseekers; particular focus on young graduates who are unemployed All jobseekers on unemployment benefit

Jobseekers from target groups (over 45 years old, single household heads, pre-retirement) and disabled persons Graduates from education institutions Young people up to the age of 25 years

All jobseekers

Entrepreneurs (up to 249 employees, sector: production, services, tourism, at least 60% jobs created to be filled by registered unemployed) Registered unemployed

16

potential)

Students

Current budgetary programmes Labour market policies and measures of the MoLFSP and NAE are financed by the unemployment insurance budget and the European Social Fund. NAE is financing the activities of CEAs and the working points. Some programmes are co-financed, and others fully financed by the European Social Fund. POSDRU is of key importance for human development and employment measures. POSDRU has 7 priority axes with the following allocation of funding (Figure 4).
Figure 4. Priority Axes and Budget allocation POSDRU (2007-2013) Community Funding (a) National contribution (National Public Funding) (b) in EUR 193.984.825 Total funding (c)= (a)+ (b) Rates of cofinancing* (d)= (a)/(c)

Priority Axis

2 3 4 5 6 7

Education and training in support of growth and development of knowledge society Linking lifelong learning and labour market Increasing adaptability of workers and enterprises Modernising the Public Employment Service Promoting active employment measures Promoting social inclusion Technical assistance Total

797.803.989

991.788.814

80,44

911.775.778 450.189.271 176.656.289 476.402.823 540.608.927 122.707.919 3.476.144.996

79.621.406 69.467.140 58.885.430 66.953.221 103.399.059 40.902.637 613.213.718

991.397.184 519.656.411 235.541.719 543.356.044 644.007.986 163.610.556 4.089.358.714

91,97 86,63 75,00 87,68 83,94 75,00 85,00

Source : Ministry of Labour, Family and Social Protection of Romania 2010.

POSDRU is financed by the European Social Fund with EUR 3.476 million, which represents 85% of the total POSDRU budget. The national contribution is EUR 613 million. The following three major intervention areas were identified and given priority in the allocation of funding: Promoting lifelong learning and adaptability of workers and enterprises, AP 2 and 3 (38.37%). Promoting active employment measures for the inactive population, particularly for people living on subsistence farming, young unemployed and long-term unemployed, as well as labour market integration and social inclusion of vulnerable groups, AP 4, 5 and 6 (34.21%). Education and training in support of growth and development of knowledge society, with the objective of upgrading the educational system and initial and continuing training, including academic and research support, AP 1 (23.55%).

NAE and its territorial structures is the beneficiary of AP 4, Modernising the Public Service for Employment. Co-financing of the projects comes from the unemployment insurance budget.

17

Reactions to the labour market impact of the economic crisis In January 2009 the Government of Romania in a dialogue with the social partners negotiated and concluded a set of urgent measures for limiting the economic and financial crisis effects and for an economic recovery. The set of measures was included in the 2009 budget in order to ensure a complete financing. The aim was to rapidly adopt adjustments to the legislation and to implement the measures as soon as possible. The following main measures were put in place: Setting a minimum guaranteed social pension from April 2009. Three months extension period for granting unemployment allowance in 2009. Exemption from social security contributions and taxes, up to 90 days, for employers and employees in periods of technical unemployment (break up of economic activities) during 2009-2010. Single legal status for sectorial committees of social dialogue as public use institutions having legal status.3 Six-month exemption from social security contribution owed by employers for hiring unemployed persons in 2010.

POSDRU launched in support of the companies during the economic crisis, funding schemes (state aids) to subsidise the employment of certain categories of persons with a vulnerable status, such as youth, unemployed and long-term unemployed, low skilled, people at risk of social exclusion and disabled persons, and to finance training programmes for workers. The state aid scheme "Money to complete the team'' will subsidise for 12 months 50% of the salaries of new employees hired from the registered unemployed that have not found a job during the last six months, single family earners, the over 50 years old, Roma communities, people without secondary education or qualifications currently in demand. The budget for "Money to complete the team'' is EUR 61 million. "Money for Training" provides subsidies for the further training of employees. The training grant is higher if the participant is a single parent, aged over 50 years, without completed secondary educational or vocational qualifications, a woman that works in an enterprise of which most employees are men, or a person with disabilities. The budget for "Money for Training" is EUR 56 million. Monitoring and evaluation structures The most important instrument to promote employment and to combat unemployment is the Employment Programme, prepared annually by NAE and approved by MoLFSP. The Employment Programme takes into account the key objectives of labour market policy in Romania mentioned above. The Employment Programme is based on the proposals of CEAs and the Employment Agency of Bucharest which take into account the socio-economic situation at territorial level. The results of
3

In 2009, the legal framework was adjusted to recognise sectoral committees for training as social dialogue structures of public use. At present this is expanded to the economic branches defined in the Collective Labour Contract. Originally this initiative has been a response to the global economic crisis, but the aim is to support a mid and long term development and consolidation of the training system based on the principles of lifelong learning and participation. The tasks of the sectoral committees include research into skills and employment structure issues, advice for training providers concerning skills on demand and assistance in training curricula design. This is expected to contribute to the drafting of sectoral strategies.

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implementing previous years programmes and the attractiveness level of active employment measures are also taken into consideration. The social partners are consulted in this process through the tripartite structure of the National Agency for Employment. Each year, a Contract of Performance Management is concluded between the MoLFSP and National Agency for Employment which provides managerial performance objectives and indicators, measures and qualitative and quantitative targets for NAE and CEAs. The contract provides the operational framework for implementation of strategic commitments made in the field of employment. MoLFSP and NAE are constantly monitoring the implementation of employment and training programmes, and achievements with performance management indicators. The assessment on the performance degree is carried out by MoLFSP on semester and annual basis. POSDRU is based on analysis of the situation in education, employment, health and on SWOT analysis at the national and sub-national level. Areas that receive ESF financing have been identified from an analysis of the weak points of human resources development, as well as from the strategic objectives that Romania has as EU Member state for the period 2007-2013. POSDRU was developed into a broad partnership framework, including extensive consultations with social partners, civil society organisations and other relevant actors in human resources development. A draft version of POSDRU was published on the ministrys website in order for local authorities, NGOs, companies and individuals interested in the programme to submit comments. Approximately 1 000 entities have been involved in the consultation and the majority of suggestions were taking into consideration. PODRU was also subject of an ex-ante evaluation in 2006 according by the European Commission. This process has led to the establishment of an implementation and monitoring structure for POSDRU including the following organisations: MoLFSP functions as managing authority. Eight regional Intermediary Bodies that respond to MoLFSP. National Agency for Employment (NAE). Ministry of Education, Research and Innovation (MERI). National Centre for Development of Vocational and Technical Education. Two Intermediate Bodies to be identified in an open tender process according to the national law and Community public procurement rules.

The POSDRU Managing Authority has prepared a Multi-annual Programme of Evaluation for the period 2007-2013. This represents the main instrument for planning evaluation activities for ESF interventions in Romania through POSDRU, for 2007-2013. Further there will be mid-term evaluations in 2009 and 2012, and ad hoc and thematic assessments for each of POSDRU priority axes. Ex-post evaluation will be conducted by the European Commission, in close collaboration with the Member states and their Managing Authorities. The POSDRU Managing Authority decided to outsource all assessments at programme level in view to provide an independent opinion about the implementation of the programme. In 2009 the Management Authority established the Assessment Coordination Committee POSDRU 2007-2013, as a national structure of partnership type, without legal personality, with an advisory role in the evaluation of POSDRU. The Assessment Coordination Committee includes representatives of the Management Authority, Intermediary Bodies, ESF Coordination Directorate, as well as representatives of central public administration, social partners, NGOs, academia and research institutes. The main responsibilities of the Assessment Coordination Committee POSDRU are to: 19

Provide feedback on the proposed evaluation approach. Provide feedback on assessment reports prepared, reviewed and improved by the external evaluator. Ensure quality control of assessment reports based on knowledge gained during the capacity building activities in the field of program evaluation. Conduct periodical reviews of the progress of assessment activities. Identify and suggest solutions on how to address the various risks associated with the evaluation process.

Local implementation of labour market policy At national level, MoLFSP and other stakeholders (public institutions, social partners) have developed National Action Plans for Employment. For coherent translation at regional level of the objectives and planning frameworks of employment policies, MoLFPS took the initiative to foster the development of Regional Plans of Action for Employment and Social Inclusion (PRAO). With the help of a PHARE financed project4 all county authorities and social partners in each of the eight regions have been involved in this process. PRAO reflects the regional context and priority fields at regional level. Regional plans were developed based on a process of regional socio-economic assessment as documents that identified regional needs and set priorities where actions are needed to encourage employment and development of human resources. The objective of PRAO is to provide a framework for medium-term strategic planning to promote employment. Similar initiatives have been implemented in terms of regional development policy and technical and vocational education. To support the process 8 Regional Pacts for Employment and Social Inclusion were created, as well as more than 30 Local Partnerships for Employment and Social Inclusion (at county level). The regional pacts for employment and social inclusion are partnership agreements concluded between the relevant actors at regional level for the employment and social inclusion field, which bring up a partnership structure at the territorial level. The regional pacts are addressing regional problems (covering several counties) by applying the principle of partnership, which will represent the interests of the community and private sector. The aim is to promote sustainable employment growth, the reduction of unemployment and fight against social exclusion. Each regional pact on employment and social inclusion it is supported by a Permanent Technical Secretariat (STP) with the statute of a nongovernmental organisation, whose aims is to provide counselling to Pact members in different areas, such as drafting and monitoring the implementation of the Regional Action Plans on employment and social inclusion and other relevant documents at the regional level, and in supporting the Pact members in their capacity as promoters of projects eligible for EU funding. The members of a pact will complement each other and will strengthen the partnership objectives, building a solid foundation. It is therefore important the involvement of the relevant representatives from different parts of the public sector, social partners, civil society etc. The size of a partnership should reflect the regional targets and issues, depending on regional circumstances and priorities. Usually the Pact members are representatives of the following institutions: public authorities (prefectures, mayors office s, counties councils, CEAs, de-concentrated services of MoLFPS), chambers of commerce, social partners (union
4

Creation of these pacts is an initiative of the MoLFSP, initiative which was launched in the context of developing Regional Action Plans for Employment and Social Inclusion (PRAO) through technical assistance project PHARE RO 2003/005 - 551. 05.01.04.04.01 "Support for MoLFSP in developing and implementing employment and training policy for EDIS (Extended Decentralized Implementation System).

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trades, employers organisations), educational and vocational training organisations, representatives of the civil society, NGOs, regional development agencies, research institutes, and universities. The employment and social inclusion partnerships have been actively involved in developing the eight PRAOs and, based on the established priorities, the partnerships are supposed to prepare project proposals to be financed from the European Structural Funds. Their usual members are representative institutions at county and local level, involved in implementing community development policies (local public authorities, de-concentrated services of the public authorities, NGOs, trade unions, employers organisation etc.). The above mentioned composition of regional and local partnerships is meant to support in a balanced manner the accomplishment of the main role of these structures, namely to find the best solutions for problems at local level for vocational training, employment and social inclusion so that they can be resolved through future projects that will be financed by the European Social Fund. In all these structures, CEAs, subordinated to the National Employment Agency, have an active role. CEAs implements the Employment Programme and the above mentioned annually defined training plans. They also manage the unemployment insurance budget. The key active employment measures include: pre-dismissal services; career information and counselling; labour mediation; organisation and provision of vocational training; counselling and assistance to start self-employment or a business; stimulating employment; payment of wage subsidises and granting of credits on advantageous terms to create new jobs. An important orientation is also towards developing projects and partnerships in EU financed projects, with the object of raising skill levels of unemployed people, information, counselling and labour mediation, modernising employment services and promoting social inclusion measures.

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CHAPTER 2 KEY FINDINGS FROM THE REVIEW

Policy and strategy integration at different tiers of government Strategic policy documents on education, skills, employment and economic development are prepared at national, regional, and county levels. A non-exhaustive list includes: Government Programme 2009-2012; National Reform Programme 2007-2010; National Employment Strategy 2004-2010; Short and Medium Term Strategy for Continuous Professional Training 2005-2010; POSDRU 2007-2013, with Regional Action Plans for Employment and Social Inclusion (PRAO), Local Action Plans for Employment and Social Inclusion (PLAO), and Regional Education Action Plans for TVET (PRAI), Local Action Plans for VET (PLAI) and School Level Strategies (PAS); National Development Strategy with Regional Operational Programme (ROP) and local economic development strategies. At national level, the Sectoral Operational Programmes provide a means to enhance policy and strategy integration. POSDRU, for example, takes into account all strategic policy documents on education and employment. Policy and strategy integration is facilitated by an inter-institutional partnership that involves all line ministries and their agencies. The extent of policy and strategy integration is lower at sub-national level. The combination of policy areas, which until recently had been under the exclusive domain of line ministries, their agencies and deconcentrated offices (e.g. employment and education), with those of traditional local government responsibility (e.g. infrastructure) demands a high degree of integration capacity. Infrastructure development, a top priority for local governments in Vaslui and Mures, is not yet sufficiently connected to a sound analysis of what it needs, for instance, for a business incubator facility to create jobs. In Vaslui, an EFRE co-financed road infrastructure project, worth EUR 27 million, is expected to create 5 permanent and 28 temporary jobs. Even if these numbers are too low to be considered a policy and strategy integration success, the fact that job creation was a selection criterion shows that integration capacity exists. Interviewees in the regional roundtable meetings reported a very low level of integration between PRAI and PRAO, the two regional Action Plans of POSDRU, and no formal co-operation between the Regional Consortia (for PRAI) and the Regional Pacts for Employment and Social Inclusion (for PRAO). PRAO and PRAI have corresponding action plans (PLAO5, PLAI) at county level, and the County Economic Development Strategies of Vaslui and Mures contain chapters on education and employment, but clear cross-references are missing. In both regions no strategic policy documents are prepared at the municipal, town and commune level, which suggests that policy and strategy integration capacity, is low or inexistent at the lowest tier of government. The objectives stated in the PRAOs and PRAIs of North-East and Centre are clearly linked with POSDRU. Different from PRAIs, PRAOs lack a mentioning of measurable outcomes, timescales, responsibilities, and of measuring procedures. This renders any monitoring and evaluation of the PRAOs very difficult. Furthermore the availability of local data was reported as major problem. Interviewees reported a lack of local labour market indicators to monitor progress in employment
5

PLAO are foreseen, but not yet existing in Vaslui and Mures regions.

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development over time, and the inappropriateness of PRAOs 2006-2008 objectives. They doubted that these problems will be solved with the current preparation of PRAOs for the next period6. The existence of multiple strategic policy documents on employment development can create a situation in which planning is performed mainly to satisfy upper-tier requirements or in expectation of quicker and higher absorption of EU funding. The impression gained from the interviews was that planning is largely driven by EU funding, and that sub-national strategic policy documents are changed or abandoned as soon as a new source of financing is available. This stretches the human and financial capacities of sub-national stakeholders, who are supposed to participate in the planning and implementation, and to assume financial participation in form of co-financing. The involvement of local stakeholders in planning and implementation is higher than in decisionmaking. The allocation of financing is still largely centrally determined. The budget lines of the National Employment Strategy, its Annual Employment Programme, and POSDRU do not have a budget plafond or a needs-based budget allocation to the Development Regions and Counties. Hence, sub-national policy stakeholders have no information available about the amount of potentially available funding. This is a barrier to strategic and integrated planning. Furthermore, municipalities, towns and communes often have insufficient financial means, and budgets of de-concentrated offices are highly conditioned; both impact negatively local policy and strategy integration. The Romanian public administration still suffers from a high level of politicisation. Changes in the government are very likely to cause changes in the senior management of de-concentrated offices. To date this has caused high fluctuation of board members of Regional Pacts and County Partnerships and, in turn, impeded the institutionalisation process and the inclusion of partnership structures in the governance architecture. Procedures related to the establishment of partnership structures had to be repeated in order to include newly appointed delegates. This caused a lack of sustainability and severe communication difficulties. The public employment service The Romanian public employment service is a semi-autonomous system accountable to MoLFSP. The President of NEA has the rank of a State Secretary. NEA delivers the National Employment Programme through its sub-national branches: CEAs, local employment agencies and work-points. POSDRU provides an important framework with a broad variety of measures and an enormous financial potential to promote employment and social inclusion. More than one-third (33%) of POSDRU financing is targeted at the promotion of active employment measures for the inactive part of the workforce, and at labour market integration and social inclusion of vulnerable groups. The Management Authority of POSDRU is part of MoLFSP. Despite the reported principle of complementarity between the National Employment Programme and POSDRU, they appear to be rather isolated and understood by sub-national policy stakeholders as two different sources of financing and accountability frameworks with little perceived scope for integration. The unregistered unemployment, especially for rural areas, vulnerable groups (Roma population, persons with disabilities, young persons leaving the state system for child protection, persons practising the subsistence agriculture) is in a constant attention of CEAs. The unregistered unemployed, which amplitude is unknown, were not mentioned by interview partners as target group.
6

The 7 updated PRAOs in 2010 are: Bucharest-Ilfov 2009-2011; West 2009-2012; North-West 2009-2013; North East 2009-2011; South-East 2009-2011; South-West 2009-2011; South Muntenia 2009-2011. The PRAO for the Centre Region is delayed as the process started later (see chapter 5).

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NEA is aware of the difficulty encountered by Mures CEA in identifying and addressing unregistered unemployment; the low, and as insufficient considered, number of personnel is a key issue. For both CEAs financial restrictions are obvious consequences of the economic down-turn. They reported that an enormous lack of financial and human resources impedes their work. From April 2009 on financial means available allowed running no active employment measures other than counselling. However, the work with young school and university graduates, a rapidly growing target group, requires more financing for in-depth analysis and targeted measures. Youth is not a new target group, but as underlined by NEA, a traditional group that has required attention since the beginning of the 1990s. In January 2009 the Ministry of Labour, Family and Social Protection launched an anti-crisis programme with three schemes: (i) a pre-dismissal scheme for companies guaranteeing a 3-months exemption from social security contributions and taxes (in 2009, over 5000 companies benefited from this facility for around 260 000 employees); (ii) Money to complete the team, a 50% loan subsidy for every new employee hired (EUR 61 million available); (iii) Money for Training targeting workers mainly (EUR 56 million). The main objective of these measures is to maintain jobs. CEAs are part of the delivery structure together with the regional implementing bodies of POSDRU. Counselling, in-company training and transfer measures for companies at risk of massive lay-offs were part of usual activities. Interviewees at CEAs in Vaslui and Mures showed awareness of the anti-crisis schemes, and reported slow implementation due to inadequate capacities. CEAs are well represented in the existing partnership structures. In Mures and Vaslui CEAs preside over the board of the County Partnership: directors of the CEAs are members of the Regional Pacts. According to the POSDRU, CEAs should play an active role in the decentralisation reform process, being co-ordinator and leading network partner at the county level. At present there are several obstacles to this, mainly caused by limited financial and human resources and a high fluctuation rate of senior management. It was not clear whether the Consultative Committees of the CEAs allow for a greater involvement of social partners in the design, implementation and evaluation of employment measures. It was felt that CEAs had no complete overview of planned, ongoing and terminated employment projects other than those belonging to the National Employment Programme in the counties; also no other institution at regional or county levels appears to have this information. It seems that projects are submitted without consultation or agreement with CEAs and the partnership structures. A key goal under the Priority Axis 4 of the POSDRU is to set up individual action plans for the unemployed. In the CEA Vaslui, 50 counsellors (out of 58 staff) are dealing with 20 000 registered unemployed, whereas 25 counsellors (39 staff) are dealing with 16 000 registered unemployed in the CEA Mures. Counsellor-unemployed ratios of 1:600 and 1:700 respectively render achieving the goal of individual action plans very difficult. Forecasting labour market development is a major concern for both CEAs. CEA Mures conducted a survey of local companies on their labour demand and kinds of employment offer until the year 2011 with the aim of organising targeted training and better match-making supply and demand. It might be difficult to collect such information as recruitment and human resource development strategies of companies are often short-term oriented and SMEs, the main employers, usually do not reveal (or are not aware of) their plans and related figures. The widespread presence of informal labour contracts might also be an obstacle for data collection. Nevertheless, studying local labour market trends and working with individual companies is important and should be intensified, in particular concerning current and future skills needs of local firms.

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Institutionalised partnership structures Since 2002, partnership structures have been established at the sub-national level with the help of Technical Assistance. The objective has been to ensure an effective, local-needs-based and efficient utilisation of EU funding. Within POSDRU this process started in 2006 with a two-phase partnership building approach. The partnership model (as explained in Chapter 5) was firstly defined with stakeholders across the different tiers of government, and subsequently established in a combined topdown and bottom-up approach, allowing for grass-root action and involvement in national level policy and strategy processes. The partnership structures at the regional level include the Regional Pacts for Employment and Social Inclusion (2006) and Regional Consortia for TVET (2002), and County Partnerships for Employment and Social Inclusion and Local Partnerships for Employment and Social Inclusion (both as of 2006) county and local government levels. The local partnerships are mostly project based and have no permanent structure. Strengthening partnerships is a key area of intervention in POSDRU Priority Axis 3 (Increasing adaptability of workers and enterprises). Support of social partners and NGOs providing services to the community are output and result indicators. In 2008, STPs were created to support the Regional Pacts and the County Partnerships in network facilitation, logistic and technical support, empowerment of members and capacity building. They are ESF-financed for a three-year period. The establishment process of the STPs was difficult and lasted two years; STP North-East started in January 2009, STP Centre in September 2009. In both cases the STP is hosted by local private universities, with part of the STP staff being university employees. The lifespan of partnerships is still too short to expect lasting outcomes, they show clear signs of the Technical Assistances footprint, and there have been problems in setting up STPs. Yet, the Regional Pacts and County Partnerships continue to exist. This demonstrates a significant level of commitment, which is an important strength to build on. Although the partnership structures include all relevant stakeholders, the limited autonomy of deconcentrated offices renders partnership working difficult, as higher tier offices are to be involved in decision-making. Furthermore, politically motivated fluctuation in senior management, as mentioned above, is a major barrier to continuity and sustainability of the partnership structures. The directors of CEAs, for example, have been exchanged recently, which significantly impeded the work of both the Pact and the County Partnership. Changes of personnel in partnering institutions, as also discussed elsewhere in this report, render difficult the development of a culture of working in partnerships Up to now the discussion and endorsement of PRAO 2006-2008 has been the main task of the Regional Pacts, in collaboration with the County and Local Partnerships. The update of PRAO, which is currently underway, is co-ordinated by STPs. It remained unclear how and to what extent the partnership structures are involved. STP North-East stated that so far no evaluation of PRAO 20062008 happened. In both counties there is successful and promising experience with international projects. In Vaslui, the County Council and the School Inspectorate formed a partnership that over the last two years successfully applied and implemented 32 lifelong-learning (Grundtvig, Comenius) and crossborder projects. In Mures County, collaboration with Italian partners resulted in a project on teleworking opportunities for young people in rural areas, financed by the POSDRU (98%) and NEA/CEA (2%). The interviews revealed a general need to further develop knowledge, know-how and the capacity to utilise ESF funding. The focus is on large projects, which may lead to a substantial flow of ESF financing. The interviews suggested a low understanding that although the Regional Pact and the 25

County Partnership are not eligible for project application (no legal personality), organisations on their own or partnering with others can apply. All interviewees agreed that the timing of the first PRAOs (2006-2008) presented a problem, since preparation happened prior to the approval of POSDRU and projects proposals thus had to be rewritten or amended according to subsequently issued Guidelines. Serious delay and a lack of transparency in the communication with the POSDRU Management Authority and the Intermediary Bodies were also reported. Apparently this caused mistrust and frustration. For the partnership structures to continue, it is important that these structural weaknesses and barriers are quickly removed. The current partnership structure appears to not sufficiently reach and involve the level of municipalities, towns and communes. There is little evidence that Local Partnerships exists. PLAO, the local version of PRAO, was not mentioned in the interviews. The high number of local government units (Vaslui: 3 municipalities, 2 towns, 81 communes; Mures: 4 municipalities, 7 towns, 91 communes) suggests that introducing a systematic bottom-up approach involving municipalities, towns and communes might be difficult. However, the most vulnerable, at risk and hard to be reached groups, such as Roma, people in undeclared or unprotected work, the long-term and unregistered unemployed, are mainly present at this level, in particular in rural areas. Hence, completing existing partnership structures by involving majors and important local stakeholders is necessary. There are promising attempts to involve the local level. STP North-East sent a questionnaire to the local majors to gather data on local employment development to build sound evidence for local projects. The two poorest communes in the Counties of Botosani and Vaslui were identified for case studies to analyse key employment challenges and social cohesion mechanisms, and to define local indicators. In the same vein, also the Intermediary Body for the County of Vaslui started a networking initiative with mayors. There is great expectation from the Regional Pacts and the County Partnerships in the STPs to revitalise the partnership structures and assist with successful application for ESF and other sources of financing. STPs appear to be more focused on the Regional Pacts than on the County Partnerships. STP Centre sees the Regional Pact as its main counterpart, whereas the County Partnership was considered an indirect interlocutor. Local partnerships were not mentioned. STP North-East made no distinction, but partner organisations had the impression that its activities focused on the regional capital Iai, where both STP and the Regional Pact are located. The update of PRAO 2006-2008 is a main task of the STPs. PRAO 2009-2013 should be finalised by the end of October 2009. Meeting this deadline might be difficult, in particular for the STP Centre, who just started working and reported the need to identify and contact the institutions and people involved in the PRAO 2006-2008 process. Both STPs saw local data collection and analysis as major challenge. Gaps in data persist on migration, business sector development social exclusion and poverty. STPs will need a complete overview of the projects prepared and submitted; addressing existing weaknesses in the monitoring and evaluation of projects will be therefore important. A long-term capacity building exercise for STPs is underway and a Community of Practice should ensure regular exchange amongst the STPs. The eight STPs are run as individual ESF projects with no national level co-ordination, which might hamper the long-term stability of the partnership structures. The main performance indicator is the number of projects submitted for ESF funding. The minimum amount of projects is ten; there is no minimum amount of ESF absorption. This might not be an appropriate indicator to review the technical support for the partnership structures.

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CHAPTER 3 INTEGRATION BETWEEN ECONOMIC AND EMPLOYMENT DEVELOPMENT

Linking economic and employment development efforts is of crucial importance for the effectiveness in regional policy. Some key steps towards greater integration of policies and strategies are underway in the two counties reviewed in this study. This chapter will discuss the current level of integration between the strategies and programming for regional development and the strategies and programming for employment development at the regional and county levels, taking into account the vertical governance dimension, with a particular focus on the degree of policy and strategy integration in the phases related to priority setting and strategy design. The chapter will identify and examine barriers to integration that negatively impact local employment strategy effectiveness, and will present approaches undertaken in Croatia to provide inspiration on how to work towards increased integration and strategy effectiveness. Organising for strategy integration In Romania, strategic policy documents on education, skills, employment and economic development are prepared at national, regional, county and municipal levels. At the national level, the planning process for Sectoral Operational Programmes is intended to enhance policy and strategy integration. For example the Sectoral Operational Programme for Human Resource Development (POSDRU) includes all strategic policy goals on education and employment, but it does not include any priorities related to economic development. The extent of policy and strategy integration is even lower at sub-national level. The combination of policy areas demands a high degree of integration capacity, and until recently the policies have been under the exclusive domain of line ministries, their agencies and decentralised offices (e.g., areas of employment and education), and the traditional local government responsibility areas (e.g., infrastructure). Most of the strategic policy documents are therefore focused on one policy area only, and usually consider economic development as a certainty that will happen at the local level once all activities and goals foreseen by strategic plans at higher governance levels are performed and met. Two key issues to be addressed are the dominance of a top-down approach in the planning process for local economic and employment development and the organisational difficulties that local partnership structures encounter in getting more involved in strategic planning and delivery. Both are briefly discussed in the following. Top-down approach in planning for change National strategies and policy documents have mostly been prepared top-down with limited consultation with social partners at the local level. There have always been requests by national level ministries and government agencies to provide information needed for the planning, but not much else and local level actors expressed in the interviews the feeling that they are not asked to participate as real partners in the process. Vertical governance is an issue in the planning and implementation process. The stakeholders involved in the planning are not necessarily the same stakeholders making decisions on funding. A number of strategies include only national (centralised) financing decisions. This is particularly visible in the field of education, where local governments control the school budgets, but seldom participate in the planning process related to functioning of the school system. Another issue with vertical governance in the planning process is the fact that Regional Development Councils, County Partnerships, and other partnerships involved in the planning process do not possess a legal personality so they could apply for funding themselves, nor do they have access to funding to 27

support the projects that have been included in the strategies. Also timing has presented a challenge. PRAOs had been prepared before the objectives of POSDRU were established. Local stakeholders complained that major changes need to be made to the projects prepared to make them eligible for POSDRU financing. The allocation of financing is still largely centrally determined. Local governments often have insufficient own financial means, and budgets of decentralized offices are highly conditioned by national strategies. This limits the accessibility of financial means for the local level and reduces their capacity for policy and strategy integration. The budget lines of the National Employment Strategy, its annual Employment Programme, and POSDRU do not have a needs-based budget allocation for regions and counties. Hence, sub-national policy stakeholders have no valid information available about the amount of potentially available funding. This is considered by the local stakeholders as another obstacle to strategic and integrated planning. A large part of the local and county budget is already earmarked as a transfer from the national level for a particular purpose (for example, improvement of school infrastructure) and cannot be used for any other goals. Any integration of various local strategies that could be done through the programmatic budgetary process is therefore impossible, even though in theory, the local governments do have the power to decide on implementation of the strategies related to their locality. On the way of building local synergies There are various elements of good practice that could be identified in the national context and in the two regions visited. Many of them could be employed better in the present context and developed further, unfolding naturally, or following simple recommendations for increased efforts foreseen at the end of this chapter. In particular a lot has been done in the recent years to empower the local level actors in public administration and civil society. The needs of the local level have been included in the agreements with the technical support provided through projects in order to increase the level of knowledge and to offer professional training, particularly in the field of local, or area-based, partnerships and their management. The involvement of local stakeholders in planning and implementation, even if deficient, is certainly higher than their involvement in decision-making at the practical level. This is something to build on. PRAO and PLAO strategies have been prepared with extended consultations with local partners, and can be considered promising grassroots initiatives. Setting up partnerships in order to deal with problems of economic development, education and employment gives the stakeholders the opportunity to really use the capacities provided locally, because the partnership model allows the integration of various policy areas. However, human and financial capacities of regional, county and local stakeholders seem to be overstretched by participation in the planning and implementation process of all the strategies. At the same time, this situation could ensure the consistency of the goals set at the various levels of public administration, if the stakeholders involved would use their cross-over position to bring the various planning committees closer together, and to consider them as parts of a whole planning process. The interviewees find it important that the partnerships are formalised and professionally staffed. A formalised partnership is considered to be more effective because it is expected to ensure stability which is usually compromised through the political appointments. The interviewees would like to increase the stability and lessen the impact of the political influence on the everyday functioning of institutions. One of the paradoxes of the present economic situation in the reviewed regions is an utter lack of understanding of the planning concept, including goal and priorities setting, and particularly measuring the impact through achieved indicators. It seems that any knowledge that might still exist on this subject is suppressed, erased and forgotten as soon as the topic of planning comes up, or it is considered the duty of higher tier government structures. The example of how the preparation process 28

of regional development programmes, ROPs, changed over time in Croatia provides some useful insights about how to effectively organise stakeholder involvement in integrated planning for local economic and employment development (Box 1).
Box 1. Organising stakeholder involvement in local integrated planning Strategic policy documents are prepared at all levels of public administration in Croatia. At the national level, Strategic Framework for Development provides the basis for all other strategic documents. National development strategies are fully integrated with the Strategic Framework, and cover more areas than the IPA Operational Programmes. There are six areas covered by the IPA 2007 2009 Operational Programmes, which have been prepared with the Strategic framework in mind (Transportation, Environmental protection, Regional competitiveness, Human resources development, Agriculture and rural development, and Cross-border cooperation). Croatian Central Office for Development Strategy and Coordination of European Funding is responsible for coordination of strategic planning and setting priorities and objectives of Operational Programmes as well as other strategic documents. It is also responsible for the Strategic Framework for Development. At the county level, a regional development programme (ROP) is a document which ensures the integration of economic development (regional competitiveness) and employment development (human resources development) policy tiers. Regional Operational Programmes are prepared through a participatory procedure, with all stakeholders at the county level included in the process. Before it can be published and accepted by the County Council, the document must be approved by an inter-ministry committee, which includes other public institutions at the national level as well as the ministries. A draft version of the document is send to a national contact point that ensures the procedure is followed and any comments or requests for change are included in the final version of the document. If the County Partnership does not agree with the changes proposed by the inter-ministry committee, it performs additional rounds of discussions and drafting, until the matter is solved. Any other strategies and policy documents at the level below the county level must relate to the ROP. The new Draft Regional Development Law proposes a change in procedure. Instead of the ROP, each county will have to prepare a County Development Strategy which would be integrated into a Regional Operational Programme, but with this change, the ROP would now be prepared at the NUTS 2 level. The difference between the two documents at the county level is merely a cosmetic one (name change). An extra level of planning has been introduced, and there is a difference planned as to the approval process by the inter-ministry committee, which will now not be done directly for the county level, but rather, it will relate to the NUTS 2 level planning document. For more information on the process of county development planning and other issues related to regional development in general, please contact Mirjana traus ( mirjana.straus@mrrsvg.hr) at the Ministry of Regional Development. An interesting example of a possible improvement in vertical governance and functioning of partnerships comes from Eastern Croatia (Pannonia) NUTS 2 region, the poorest part of Croatia. The municipalities and counties comprising this region felt overwhelmed with the constant requirements from the national level to participate in strategic planning, to collect and analyze data, and to prepare projects for the future project pipeline and for the operational programmes (for IPA, ESF and ERDF). At the same time, the counties and municipalities were preparing their own development strategies, which had to be integrated with the higher-level strategies, and their measures complementary with the measures of various national-level strategies for areas of employment, economic development and education. Their capacity was stretched to the limits, and they were about to give up the integration approach and concentrate only on the local economic development through simple infrastructure projects and similar activities. However, one of the regional development agencies (Regionalna razvojna agencija Slavonije i Baranje) has taken lead to organise regular meetings of stakeholders from this region, and to work as their mouth and ears. It started by preparing common positions of the regional institutions to the requests of the government, and has achieved results in changing some of the decisions and procedures planned without including the county and local level. Improved communication brought about more possibilities for common planning and project preparation, and better use of local human resource capacities that can be borrowed among partners. The agency is now running some of the necessary capacity training for other partners as well. This bottom-up setup is considered as a very worthy example in Croatia and other NUTS 2 regions are following their example. For more details please contact Stjepan Ribi, director of Regionalna razvojna ag encija Slavonije i Baranje, at stjepan.ribic@obz.hr, or www.slavonija.hr and www.obz.hr.

Conceptualising strategy integration Economic development is considered to be a local problem that needs to be solved with local instruments promoting economic growth. The local level is supposed to know how economic growth can be achieved once these preconditions are met. At the local level the concept of economic development is, however, very much narrowed to infrastructure development, whereas education and employment seem to rank lower in the hierarchy of political relevance. The latter are policy areas that were traditionally dealt with at the national level and only recently responsibilities have moved to regional and county level structures. 29

Strategic thinking and planning exercises on economic development are evidently based on the principle of social solidarity and balanced distribution of income earned in the society. Due to historical reasons and the long-time influence of living in a socialist society, citizens as well as public service employees tend to perceive employment as a social right rather than an economic category. This is a major obstacle to actually achieving economic growth, because the concept of trade-offs, related to establishing a functioning market economy and increasing competitiveness, is not clearly understood and conceptualised in the planning and implementation of strategies. These are two key obstacles that need to be addressed in order to achieve a greater integration of strategies in order to expect a greater effectiveness of public policy efforts to strengthen local economic and employment development. Focusing on infrastructure development Local governments have an interest in infrastructure development mainly because it is simple to implement and because its results are immediately visible. Human resources development investment instead takes longer to show tangible results and might be more complicate to manage (particularly if ESF is used as a source of funding). Measures related to infrastructure development are top priorities for county and local governments in Vaslui and Mures. These measures are not yet sufficiently connected to a sound analysis of possible impact on economic growth. For example a measure supporting establishment of a local business incubator, or the establishment of a local industrial zone, has the possibility to create jobs if connected with measures promoting business start-up, innovation and growth. As discussed by the interviewees, PRAO and PLAI, and county and municipal development strategies, if existing, rarely include integrative goals reaching across sectors, and in the best case, the strategies include chapters on employment and education without any serious analysis of the possible integration of goals. An illustrative example of this is the mismatch of VET graduates with regional labour demand. Graduates finish with diplomas and knowledge that have not been in demand by local industries for the past 20 years. At the same time, local industries cannot find workers with particular skills, and many positions are not filled, lowering the competitiveness of the local companies. Hence there is much room for integration. A greater involvement of the planning committees of the various partnership structures, whose members are local experts in demand and offer dynamics of local markets, could help. Local development between two chairs - convergence and competitiveness In the opinion of many interviewees, the objectives set by the Romanian government correspond to those for convergence countries. It is widely understood that those objectives must be met and they are clearly addressed by strategic documents and operational plans. The gaps in economic development are supposed to be addressed by effective employment strategies at the local level. Employment is considered an important part of economic development. The competitiveness objectives are yet not officially considered in strategic planning, nor are there any measures proposed related to achieving these objectives. In order to achieve a real decrease in unemployment through an increase in employment effective measures must be taken to improve private sector performance. Bluntly speaking if private sector performance is not improved, any support to increase employment is limited to supporting socially disadvantaged groups in gaining access to a shrinking job market. This distinction of efforts towards achieving convergence and competitiveness goals is complicating the understanding of a necessary integration of strategies, in particular at the local level. Also because local politicians and stakeholders involved in the design of such integrated strategies have to deal directly with local communities, who will have to bear the trade-offs of moving towards increased productivity and competitiveness.

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The exiting local strategies address employment matters from a social instead of an economic viewpoint. This limits the integration of employment policies with economic development policies which would be possible if both convergence and competitiveness objectives were considered in strategic planning. For example, a summary of the financing agreement for establishment of the permanent technical secretariats (STP) in accordance with POSDRU Implementation Framework Document states that STPs are established to respond to the specific objective of Priority Axis 3 Increasing adaptability of workers and enterprises. Unfortunately, the Key Area of intervention that the STP project is aiming at, limits the objective to Developing partnerships and encouraging initiatives for social partners and civil society, and making the concern for social inclusion and employment the key priority for the STPs, leaving, for example, an increase of the competitiveness of enterprises to other policy measures. A similar situation is revealed in the current priorities of Romanian labour market policy: Even though one of the overall objectives is ensuring the functioning of the labour market as to be favourable for job creation, for reducing the non-declared work, and for a management fit for changes at company and workers level,7 the main strategic and programmatic documents related to the current policy all have the workers, the unemployed, and the persons from vulnerable groups as targets for active measures. Reviewing the work of the local, county and regional partnerships did not reveal strong policy measures that would be aimed at employment development from the perspective of enterprise adaptability to the changing conditions of global markets. The target groups for policy measures are recent graduates, illiterates, older unemployed, longterm unemployed, Roma and other minorities etc., who all face distinct difficulties in accessing the job market. Strategic issues such as structural changes in industries, or closing down of mines, are not addressed by policy measures and the local strategies. When this issue is considered at the practical level of providing financing for employment development, the question of how to most effectively use the money becomes irrelevant, because, at the moment, the measures planned in strategies and operational programmes provide a choice between giving money to the unemployed financing programmes increasing the possibility of accessing the job market versus giving money to the employers financing the employers cost of employees about to lose their job because of structural problems in an industry (free Friday programme, for example). The unfortunate consequence of a low integration of convergence and competitiveness objectives is that private sector development issues are not taken account of. Strategies do not address the need of businesses to adapt to new circumstances, which is likely to result in or to enhance already existing structural problems. Under the influence of the global crisis and internal structural problems, companies are closing, massive layoffs are looming, industries are dying, and not much seems to be done to help change this trend. The planned measures address only the already unemployed people, or people looking for a job, with only a small number of measures aimed at changes necessary to remain competitive on the job market, such as providing additional education or training. However, the measures address people who could lose their job, and not the companies who should increase their ability to find new work and new markets and in turn hire more employees. The objectives of the County Agencies for Employment in Vaslui and Mures counties included creating new jobs, and one of the areas of activity was counselling and assistance to become selfemployed or to start-up a business, as well as providing loans on advantageous terms with the intention to create new jobs. In discussions with the regional pact and county partnership members the impression was gained that these activities were abandoned and it seems that existing companies are not offered support measures which would offset the job losses or help creating new jobs. Legal
7

Quotes from Financing Agreement POSDRU/6473.3/S/33409 , p.1 and the background report prepared by the Ministry of Labour, Family and Social Protection, p.6.

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regulations regarding employment are certainly more complex than in a number of other EU countries, further restricting labour mobility. As well, the private sector is reluctant to employ additional workers because of the rigid labour regulations, which limit the companies ability to respond to the changes at the market. These issues are, however, beyond the scope of this study. A good example of integrated strategic planning and coordination of policy measures can be found in Varazdin County in Croatia. The County Regional Development Plan foresees a priority Development of a high-value-added economy. As one of the measures to achieve this objective it proposes establishment of a technology park and incubation centre (Box 2). Such circles of investments in business infrastructure and the improvement of business climate combined with investments in educational programmes, human resources development and institutional development are likely to be beneficial for economic development. Similar integration could be achieved in Romania at locations planning development of business related infrastructure if it can be ensured that all stakeholders participate in development of common development goals and priorities, and if it can be ensured that all stakeholders understand the wider picture i.e. that economic growth includes more than just infrastructure development. The integration would probably best happen at the county level because the County Partnerships have excellent insight into the needs of local economic development and the given capabilities of local actors. To achieve improvement in integration practices, the County Partnership will need some extra training in economic development issues in addition to training related to project development and partnership management.
Box 2. Towards the development of high-value-added economy in the county of Varazdin The technology park was established and its management is financed by the County. The Park is situated at the premises adjacent to the local high school specializing in technology vocational training. The Park management invites companies to settle in the park only if they provide value added services or develop products with high added value. The resident companies mostly specialise in production of various prototypes, robotics, and information technology services for communication industry. The companies located in the technology park are obliged to ensure that their equipment can be used by the school to train the students, and company engineers are invited to be mentors to the students. They are financially supported by the programme run by the local Employment Centre. The Employment Centre implements national policy of employment development which is well integrated at the regional and local levels. One of the policy measures aimed to achieve better connection of the labour market and the needs of the local industries includes the programme providing funds for mentoring programmes. The companies are glad to provide this service to the students not only because they get paid for their efforts, but because it allows them direct access to their future human resources whose training is geared towards the needs of the companies. The City of Varazdin has integrated its economic development strategy with the County ROP and financially supports the local college in its course development through the measures related to its priority Improvement of tertiary education. The College has received accreditation for high quality of its programmes related to ICT and industrial robotics sector. The graduates get employed by the local companies (many of which are situated in the Technology park), in turn increasing their competitiveness and allowing them to extend their product lines or services. For more information, please see www.azra.hr and contact Josip Borak at the Development Agency of Varazdin County, AZRA, at josip.borak@azra.hr.

Issues around capacity for strategy integration at the local level The interviewees stated that more help is needed at the local level in preparing strategy and policy documents. Processes and procedures are not entirely clear to them, and they need to be simplified and improved, particularly in terms of linking the objectives of the different strategies, in planning and managing measures and in defining appropriate indicators. Future projects are likely to be missing their objectives if the latter are despite being appropriate for the context, lack sound analysis. Furthermore the local actors seem to focus on their local domains. This makes strategic planning with a wider regional relevance difficult. Whilst there has been some development of expertise and a broad framework for planning and management has been established, monitoring and evaluation mechanisms are still very weak. There is no culture of lessons learned in the public administration or partnerships and accountability mechanisms are still underdeveloped.

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Overlapping strategies One of the main issues raised with regard to capacity was the overlapping of activities, particularly between PRAO and PRAI. For example, PRAI plans certain courses for vocational training through the school programmes, and CEA delivers the same courses planned by PRAO. It seems that there are two sets of standards in PRAO and PRAI professional and occupational. It is possible to set the same standards and avoid the overlap amongst objectives and the measures planned by PRAO and PRAI. One of the key success factors for PRAO is considered to be the allocation of funds according to local needs. The indicators need to be set as real as possible, to avoid duplication and waste in the process. At the local level, any strategies are considered to be only on paper and not as a working instrument. There is never enough public debate in the process of preparation an example was given by the participants with the process of preparing Agenda 21. At the local level, there is no common structure to evaluate the objectives, priorities, measures, or to monitor progress. Each strategy has its own way of evaluating results, and those are not integrated, even if the same institution is performing them. Strategic planning procedures at the local and county level in Croatia are also considered too lengthy and complicated, and the planning process is also lacking in open public debate. Nevertheless some development is underway to establish trust and sustainable structures (Box 3).
Box 3. Facilitating participation and trust development in regional planning efforts Regional planning in Croatia has so far been a last-moment activity, and for the lack of time, mostly the objectives and priorities were decided not by the counties and local institutions, and by the citizens of the counties, but were imposed by the consultants. Also, strategies which did not include sources of funding did not have much effect so far. Only 6 counties had planned a specific budget in the Regional Operational Programmes (allocated through the EU funds) for priorities and measures they have planned. All other counties have effectively only put together a wish list of projects that would be of interest to stakeholders, but there were no measurable indicators, no action plan, and no responsible stakeholders identified who could actually implement the plan and submit the project proposals to open calls for financing. Nevertheless, the counties who assigned the budget for projects did not benefit very much knowing in advance what could be financed by the EU or national funds. This fact did not help them grow their skills and capacity, and when the EU funding was stopped, they were less capable of applying for projects than other counties who had to learn faster because they were forced to develop their own capacity and not use technical assistance and help of consultants. However, the counties have built essential partnership skills that helped them pick up speed very soon after they realized that technical assistance and EU funding for ROP projects will stop with the allocated funds. A good example is Sisak-Moslavina County, one of the counties that have assigned a budget to its ROP. The County has managed to keep its ROP partnership alive, and has set up a department at the county administration office to help run the partnership. No money was allocated directly to the partnership, but political support and good management skills of the people responsible for running the partnership have helped its survival. As well, the partnership was run by the employees of the County who were paid for this work by the County. At the moment, the stakeholders of the partnership are applying with their projects to all open calls. The projects were already identified in the ROP, and are fully in line with the economic development, employment and education policy. For more information, please contact Snjezana Tomasevic at Sisak Moslavina County, www.smz.hr, snjezana.tomasevic@smz.hr.

Institutional performance and collaboration with externals Institutional performance of the local and county employment services is measured and reported through 13 indicators, which are considered too many by the staff of the employment services. The indicators need to be better defined in accordance to the appropriate objectives of the employment services, which should be enough to assess institutional capacity and performance. However, even if the performance is considered adequate and appropriate to the objectives set, the staff of the two CEAs felt that they do not have enough experience to prepare and implement ESF projects, yet they are interested in more training and gaining practical experience. Also local stakeholders, that is mainly the members of the regional pacts and the county partnerships that were interviewed, seem to outsource most of the project preparation. Consultants are used to prepare projects in order to offset the 33

insufficient capacity. Projects prepared in such a way are likely to present additional problems to the ones involved when it comes to implementation. The county and local employment agencies consider that they do not have enough personnel at the local level to fulfil all their duties (analysis and data collection, planning, labour studies etc. on top of counselling, match-making activities and vocational guidance). That is certainly true, as data shows that some of the agencies have to work with one counsellor at 600 registered unemployed persons. Due to a lack of funding, it is not possible to employ additional counsellors, even if there is a real need for it. Moreover the employment agencies are reluctant to consider employing additional staff through projects run by other stakeholders, as well as using results of projects implemented by other stakeholders for the benefit of the employment office. They are under the impression that it is not allowed to do that, probably connecting this set-up with outsourcing of activities of the employment services, which seems not to be allowed by the regulations. This issue should be revisited by relevant stakeholders at national and county level as it may reveal unutilised opportunities as the example from Croatia shows (See Box 4).
Box 4. Collaboration to increase the impact of employment measures The Croatian Employment Service (CES) in Kutina co-operates with the local NGO, Association for Disabled Persons - OSI, and the City of Kutina. CES is implementing a national programme supporting employment of persons with disabilities, but on its own, CES does not have staff nor does it have the knowledge to deal with specific needs of persons with disabilities. CES Kutina has decided to involve ADP (OSI) in their work, to help them reach the potential employees and explain to them the benefits of employing people with disabilities. In this way, the employees could understand immediately the extent of the disability and the specific needs of such persons. It helped the potential employees to find out whether they can adapt the workplace to persons with disabilities, and to adapt the available jobs as well. In coordination with the City, ADP and CES have promoted the national financing programme, which resulted in employment of 5 people with disabilities in the local enterprises and the city administration, reaching the targeted number of new employees with disabilities for the first time. For more information , please contact Jozefina Kranjec at udruga-osi@hi.t-com.hr or at and see www.udruga-osi.hr.

International and cross-border contacts could be used better for employment and economic development purposes. Mures has a long history of cooperation with Zala County (Hungary) and Iasi with Moldova. This cooperation could be gradually transformed into a project partnership, starting with a targeted study visit. Romanian Municipalities have a liaison office in Brussels, which can be used in order to collect knowledge about European best practices, networks and project partnership searches. A well-planned Brussels study visit may prove useful. Understanding EU procedures The observation made from the interviews is that a number of institutions are ignoring the availability of ESF or ERDF funding, or even refusing to use it, because the procedures associated with EU funds are perceived to be too complicated, and national funding, if available, is used instead. The national funding procedures have been changed in the past few years and correspond in many ways to the EU procedures, so there should be no problems to apply to both sources. It seems that stakeholders believe that national funding is distributed according to political decisions and not based on the real merit of the project. They do not have any real feedback on the quality of their projects applied to national funding sources, causing low trust in the quality of projects proposals, and that might be the reason why they avoid applying to ESF/ERDF funding. In Croatia, the situation is somewhat similar as to the perception that national funding is given to the politically acceptable stakeholders. However, that does not stop Croatian institutions from applying to the available EU funding, but their thinking is overconfident projects are valued by the applicants as much better than they really are. Applicants are also trying to lobby for their projects with the European institutions and other authorities responsible for EU funding (Box 5). 34

Box 5. Streamlining project application requirements In Croatia, project applicants are disadvantaged because they seldom, if ever, receive evaluation results and recommendations for improvements of projects from the EU sources, whereas they do get the guidelines to improve the projects from national ministries. Lately, there has been a change in approach by the ministries dealing with national funding. They are using the standardized forms for project applications, very similar to forms for EU funding. They are publishing guidelines for applicants, and making evaluation and financing results publicly available. The efforts by the Ministry of Economy, Labour and Entrepreneurship (MELE) and their associated Croatian Agency for Small and Medium Enterprises (HAMAG) show a more transparent approach. As well, they have started integrating the measures they implement with the measures of other ministries, to avoid overlapping. This situation is particularly visible in the new Guidelines for Applicants prepared for various sources of financing (either for EU funding from IPA component III, or from national funds). The Guidelines state the requirement to include all levels of strategic planning into the project preparation. They are based on integrated strategies and operational plans as well. For more information, see www.hamag.hr, or www.mingorp.hr, under Open Calls. Documentation provided could be useful to set up a similar system in Romania. Contact persons are Spomenka Rakui (spomenka.rakusic@mingorp.hr) and Katarina Markovi (katarina.markovic@hamag.hr).

Project-work integration A situation of poor policy and strategy integration is worsened by the introduction of projects into the work of public administration organisations. Projects are always a burden on top of everyday duties, as they were not planned as part of the latter. Civil servants are not interested in participating in any additional activities on top of their official work duties, because they do not receive extra payment and are not freed from their regular duties to undertake work related to the project. This could be offset with providing civil servants with annexes to their work contract specifying which duties can be abandoned due to increased activities related to projects, unfortunately that is not possible as long as the integration amongst strategies and policy measures is not improved and work is actually planned according to the objectives set by different strategies. Motivation of civil servants is possible, again, through careful planning activity. Work of civil servants can be a part of in-kind own contribution, or financed in European Social Fund, creating additional tasks and overheads on one hand, but generating budget surplus on the other. The overhead could be covered from the budget surplus in the frame of a fee agreement between the institution and the civil servant (Box 6).
Box 6. Fee agreement to stimulate project-work integration An example of a good practice is the project of The National Library of Foreign Literature in Budapest, Hungary. The Library participates in the Social Renewal Operational Program (implemented through European Social Fund). The main objective of their project is improvement of minority services in the Library: on-line services in the languages of 13 national minorities, minority data base development, informal education of high school and university students, involved in minority education. These activities cannot be performed by an outside service provider, as only the Library staff has the knowledge to implement the project. The civil servants are changing their passive attitude, and are becoming involved in the activities, because their additional efforts will be rewarded by a simple fee agreement system. For more information, please contact Anna Maria Papp, Head of Department & Curator of Romanian Books at papp.annamaria@oik.hu, or see www.oik.hu.

POSDRU organisation The POSDRU budget is split by axes and timelines, but not according to regions, due to the fact that strategic projects financed by POSDRU funds should be intra- or cross-regional. It is not a good idea to split the budgets by region and allocate them in advance. Even though the regions think such advance allocation would help them bridge the capacity gap amongst the regions, it would only enhance the living-off-rent attitude amongst the regions which are not well developed. Instead, more should be done to increase the capacity of those regions currently lagging behind. An example was given by the participants related to the applications submitted to the Intermediate Body. They think that because there is no mechanism which will balance the applications and funding allocation among the applicants, poor regions did not get any projects funded, and the area of Iasi, for example, has 35

absorbed more than 90% of available funds in that particular call. The interviewees have identified the real problem themselves there is no capacity in other localities to apply for projects. It would not be helpful to punish Iasi (or any other more advanced location) for being good in project preparation. Instead, the capacity of the regions lagging behind must urgently be increased, including their human resources and financial capacity, and not just the knowledge needed to put together a good project proposal. Interviewees also identified other issues with regard to POSDRU and the Management Authority. The planning process, including publishing of calls for proposals, is considered to be very long and the evaluation and appraisal process is too long and not sufficiently transparent. Certain calls for proposals were changed whilst the call was open and guidelines were changed when the call was already published. An issue identified was the lagging payments to already contracted projects, as well as the exchange rate problem related with it the payments from the MA are in RON and the budgets are calculated in EUR, which sometimes brings big differences in available financial means due to exchange rates. The participants say that some calls were launched but the deadlines were not followed. The procedures might be lengthy, but there might be a good reason for that, anyway the review panel does not have enough insight in the functioning of the Management Authority to be able to confirm those statements. It would be advisable however, for the POSDRU Management Authority to run an inquiry with the applicants and local partnerships, in order to identify the possibly weak areas that could be improved with just little effort. Clear criteria for projects are certainly needed, local level needs and objectives should be reflected in evaluation as well as planning and preparation of projects. Partnerships and strategy integration Partnerships are often considered to be the answer to a lack of capacity and technical skills in single organisations, but, if a partnership becomes a closed club, not much will improve. An integrated approach to local development includes many different stakeholders who work together towards reaching joint objectives. Not all stakeholders will have the same interest in all projects and initiatives; nevertheless, a partnership can function well with changing stakeholders if its co-ordination works well. The STPs are considered the answer to the issue of co-ordination and technical skills; however, there are a number of issues that impede their work. For starters, establishment of STPs is a project with limited duration and funding. At the same time, the expectations of partnerships are much higher than any STP can provide through human and financial resources available through the project. There are still management issues in partnerships, mostly related to poor strategy and policy integration and unclear objectives. Partnerships present a challenge because of the constant changes in personnel coming from various stakeholders, resulting from the above mentioned politicization of the public sector. Unfortunately, this can result with lacking initiative from important partner institutions that lose track of the other partners and their representatives. Local financial sources are inadequate for any serious support of partnerships and their work, as well as the co-financing requirements of EU funded projects. Establishing partnerships as legal entities might be a solution to this at it would allow them to apply for projects. In the opinion of the interviewees, a partnership is considered functional when an STP has been set up, seeing it as the institution that will run the partnership and provide technical support. Setting up an STP is like the final brick in the partnership structure. Unfortunately, finishing a building does not ensure that anything meaningful is going on inside of it and the same goes for partnerships. The structure is there, the people are there, still there are no results. It is possibly the question of setting realistic objectives that a partnership can achieve, rather than being able to work together and produce results. Furthermore representatives of the reviewed partnership structures only named during the meetings objectives related to an economic or employment development strategy. None of them 36

named any objectives for the partnership itself, for its work and daily functioning. Conversely, a partnership without clear goals cannot be evaluated, nor can its results be measured. The newly acquired knowledge of strategic planning and public management could be used as a basis to integrate various strategies and to better use human and financial resources available at the local, county and regional level. An intermediary body could be set up at the regional level (this could be the Regional Council with extended responsibilities and capacity) which will include members from all Managing Authorities (for all sectoral operational programmes active at a particular time). This body will help integrate the strategies by performing cross-checks against Romanian legislative, EU directives, and Sectoral Operational Programmes, as well as the national strategies. This is a relatively cheap measure that would improve the weakest link in the present setup at the regional level is setting up a partnership web portal to enhance communication and information exchange. It could also be financed as an ESF project. Partnerships would profit from a common medium for best practices exchange, information on strategies and policy measures, local and county development strategies database, case studies, project database, and a forum where they could meet in the virtual world (meeting in the real world are very cumbersome and expensive between the regions at a distance). At the same time, they would be given the tools to prepare common projects at the interregional level. This portal could provide the link to Intermediary Bodies and Managing Authority and ensure better communication at the vertical and horizontal axis. Participation of the regional, county and local partners in the upkeep of the portal and actively participating in discussions and activities of inter-regional partnerships could be awarded by the national partners (ministries) by providing additional capacity building training or by organizing meeting for the partnerships in person. The above mentioned intermediary body could set up an accountability system (monitoring and evaluation of various strategies) to address the issues of vertical governance. This can be in a form of a checklist procedure, a manual, or a workbook, explaining the planning and implementation process and the role and responsibility of each stakeholder in it. It could serve to identify the possible problems in the system which can be addressed immediately. As well, it would make clear what financial allocations are available at each governance level, and it would help identify a mismatch in responsibilities and financial allocations. In order to increase motivation of local or county governments to participate in policy planning and implementation, some incentives for participation in the process can be built in to the system, such as participation in specialized training increasing competencies of the local/county government level, or financial incentives such as reduced cofinancing requirement for stakeholders participating actively in the whole process, or for project proposals that demonstrate a particularly high degree of policy and strategy integration. The incentives should be aligned with the real needs of the stakeholders. Creating and using local evidence Strategies for employment and economic development at the county or municipal level do not include a real economic overview of the area. The availability of local statistical data was reported as a major problem in the two reviewed regions. There is only few firm level data available, but no data on economic performance of counties, municipalities and tows. The other problem identified is the level at which data can be compared. Usually the local or county levels are not available for analysis, as data is not collected nor collated at the appropriate level. This becomes a problem for any serious economic analysis which should be used as a basis for strategic planning of economic and employment development. Neither general nor sectoral labour market studies are available; yet a sectoral approach would be of particular interest for regions with limited number of industries.

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Lack of local data Interviewees reported a lack of local labour market indicators to monitor progress in employment development over time, and the inappropriateness of the PRAOs 2006-2008 objectives. They doubted that these problems will be solved with the current preparation of the PRAOs 2008-2010, and have expressed the wish to commission labour market studies that would provide the needed indicators for PRAO and economic development strategies. An additional problem comes from the fact that projects, which are submitted for financing to the respective Intermediary Body, must reflect regional objectively verifiable indicators, but the policies and guidelines do not reflect regional objectively verifiable indicators only national or local. Similar problems exist in Croatia, where data needed for economic planning is not available in a timely fashion for the county level (the latest GDP at the county level was calculated for the year 2005). A number of issues lie in the fact that the authority of the Financial Agency has been decreased by law and some of its tasks were shifted to commercial banks that have no obligation to report certain statistical data. The problem is obviously not in collection of the needed data, but in the fact that data is not analysed in the way needed by the county and local levels. (Box 7).
Box 7. Towards developing indicators needed for strategic planning at county level The National Statistical Office of Croatia is collecting a wide selection of data; nevertheless, it is not providing the necessary analysis which would allow economic planning at the county or local level. Recent introduction of NUTS 2 statistical regions has improved the availability of data for the level between the county and the state. Unfortunately, there is no requirement for the statistical region to plan economic development at that level as yet, even though such a strategic document has been foreseen in the new draft Regional Development Law at a certain point. For unknown reasons, the requirement to produce this document will not be included in the final version of the Law. At the same time, nothing has been done to improve the availability of data for the county level, at which there is a requirement to prepare an economic development strategy. A solution to this problem was suggested (but not yet implemented) in Croatia that might work in Romania as well. The problem is obviously not in collection of the needed data, but in the fact that data is not analysed in the way needed by the county and local levels. The counties of Croatia have through their NGO (Assembly of Croatian Counties) analysed the collected data and suggested a lis t of indicators needed at the county level. The suggested indicators can be read from the available data, so no changes in collection practices are needed. The counties initiated the discussion with the National Statistical Office and have offered to pay for the analysis software to be set up at the NSO. For more information, please see the website of the Assembly of Croatian Counties, www.hrvzz.hr, or contact Marta Vidakovic Mukic at tajnistvo@hrvzz.hr.

Objectives and priorities setting As mentioned above, strategic planning is performed according to financial means available, and not according to the identified needs of stakeholders and partners. In the interviews discussions about the objectives of PRAO showed that these are only vaguely defined. They do not include numerical values, nor do they follow SMART logic of setting objectives and priorities. Results are foreseen in PRAO, but these are only descriptive and do not include objectively verifiable indicators. The goals set by the national and regional employment strategies are related to input of activities (men/days) and output of people (cases) processed (or participating in the training), rather than related to changes in processes, or other foreseeable results. Strategic planning documents at county level are very generally oriented, and list no objectively verifiable indicators, no sources of funding, and no real measures aimed at improving the situation. Planning has been rushed and guided by the restrictive time limits of available EU funding. There was no time to check the strategy integration between the local, county, regional and national strategies, and in many cases the local strategies were prepared before the national (see above). Obviously, this is not a basis for a sound local integrated employment and economic development strategy, nor will the measures foreseen in such a strategy bring quality results.

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A typical example of the objectives set in a strategy can be found in the Development Programme of Mures County. In Priority V, for instance, the expected results are: to reduce unemployment by creating greater mobility in the labour market; and to increase the number of employees who have completed qualification training/specialization. Across strategies that were discussed on-site, mostly the objectives were expressed as: to decrease unemployment and to increase economic development. One of the rare examples of a numerical objective can be found in the Employment Programme, which includes the proposals of CEAs. Unfortunately, those objectives are indicating the results of the activities performed, rather than the outcomes which could be related to the overall goals. Benchmarking of the local employment offices against the others is based on performance according to the goals set, and those tend to be simple extrapolations of prevailing trends. The lack of objectively verifiable indicators in the strategies leads to the inability to monitor achievement of objectives, and the evaluation of strategies, or evaluation of results achieved by activities aimed at implementing the strategies becomes impossible.

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CHAPTER 4 LOCAL EMPLOYMENT STRATEGIES AND THE PUBLIC EMPLOYMENT SERVICE

Introduction In the first decade of the 21st Century Romania, compared to other EU member states, shows a relatively low employment and simultaneously a low unemployment rate.8 Undeclared and informal work, people on subsistence farming in rural areas, (high and low skilled) people who emigrated to foreign countries, a large number of inactive persons or early retirees, the low rate of employment of young people under 25 (24,5%; 2009), the rise of long-term unemployment to 4% in 2005 and a loss of workplaces are factors which may explain the relatively low general employment rate of 59% (1564 years, 2008), which is 11% below the Lisbon Target.9 With regard to the unemployment figure, Romania performs much better than most of the other European Member states. In 2008 the registered unemployment rate (NAE source) in Romania varied between 3.7% and 4.4%, due to the crisis it roused to 6.3% in May 2009, which is still under the European Union average. However, it should be taken in account that many unemployed do not sign on to the live register.10 The overarching objective of the Employment Strategy of the Romanian government and MoLFSP is to achieve the targets of the revised Lisbon and European Employment Strategy. Maintaining jobs (in particular during the crisis), reducing undeclared work, improving access of vulnerable groups to public services and raising competitiveness of SMEs are priorities of the national employment strategy. There are two major programmes on national level that focus on the employment/ unemployment issue: POSDRU 2007-2013 and the annually updated Employment Programme of NEA. Both are based on the National Employment Strategy 2004-2010 and the National Employment Action Plan. For both programmes MoLFSP is in charge, but they are as in other European member states (for instance Germany) managed and implemented by different bodies within the ministry and also on the lower government levels: POSDRU is managed by the ESF Managing Authority and the Employment Programme by the Directorate for Employment Policies, that approves, on the basis of a management contract, the Employment Programme, which is annually prepared by NEA. According to the Managing Authority of POSDRU these policy initiatives are complementary by having in common active human resources development, creating more and better employment and tackling unemployment, in particular long-term unemployment and the unemployment of vulnerable groups. Moreover, the development of the institutional capacity and the concentration on special target groups are common sense policies. The POSDRU Managing Authority emphasises that a new, more
8

See the low unemployment - low employment paradox described by Sorin Ionita in his case study Integrating Employment, Skills and Economic Development , OECD LEED Programme, 2005. EUROSTAT. According to the interviews in the counties many unemployed are not registered (Vaslui County PES estimates, for instance, that as many unemployed as are registered are not registered), because they do not see any incentive to register themselves (about 50% of them receive unemployment benefits Tirgu Mures County) or are not able to be reached.

9 10

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integrated approach with innovative measures and pilot projects is needed. POSDRU is seen as a flexible framework providing funds until 2015. According to the Managing Authority this funding framework should be better used by the regional and local level. Regional Partnerships have been organised, but the regional and local actors do not care enough for the National Plan. This chapter will examine the current contribution to local employment strategies, with a particular focus on Vaslui and Mures counties, in terms of steering and facilitating partnership working. It will identify and discuss barriers as well as good practice and present good practices from Germany that provide inspiration and guidance to enhance the role of the public employment service in promoting and supporting local employment. Challenges and opportunities with regard to local employment strategies National context POSDRU11 with its seven priority axis provides an important framework, a broad variety of measures and an enormous financial potential for some of the most demanding challenges of the Romanian labour market. Moreover, POSDRU offers a stable structure for the implementation of the Employment Strategy (Regional Pacts, Regional Development Agencies, Permanent Technical Secretariats, Intermediary Bodies, County partnerships, local partnerships). However, the local level, understood as the level of communes, municipalities and towns (Nuts 4) seems yet not fully integrated into the POSDRU structure. The overall objectives of POSDRU are: (i) human capital and competitiveness raising by linking education and life long learning to the labour market (ii) providing enhanced capacities for future participation in a labour market, which are modern, flexible and inclusive (for 1 650 000 people). The National Employment Programme focuses on (i) matching a large number of potential employees with jobs provided by the employers (ii) implementing the active and preventive measures for the unemployed and for persons not performing an economic activity or persons who are at risk to loose their job (iii) diminishing the long-term unemployed by providing alternative employment for the young people (6 months to registration) and the adults (12 months to registration) (iv) lengthen the active life of persons who have more than 50 years by including them in active measures. The Employment Programme and POSDRU should be complementary. Currently it appears that POSDRU and the National and Regional Employment Action Plans and their respective structures and bodies are operating separately and are not linked in an appropriate manner, given that their general objectives are rather similar (see above). However, the priority axis 4 of the POSDRU provides strategies and financial resources for the modernisation of the Public Employment Service an important step to improve the capacities of the CEAs and the local employment agencies and workpoints. One of the specific objectives of POSDRU is improving the Public Employment Service. Priority Axis 4 is dedicated to the Modernisation of Public Employment Service. (This could be seen as one of the linkages between the two programmes mentioned above). CEAs are setting up their occupational and training programmes, which are then forwarded to the National Employment Agency for approval. The priority axis 4 document amongst other envisaged a decentralisation process, a stronger role of the NEA (including the CEAs) as a co-ordinator of different actors on the labour market and the development of strong regional and local networks including the main stakeholders on
11

Sectoral Operational Programe Human Resources Development 2007 2013, official draft January 2007, Government of Romania.

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both levels.12 This can be seen as part of an ongoing reform process in order to delegate more competencies to the local level. NEA, in consultation with CEAs, provide a national Employment Programme and a structure for an active employment strategy offering a broad variety of instruments (for instance, individual and group counselling, wage subsidies, training measures, publicly financed work schemes etc.) in order to maintain jobs and to activate and integrate unemployed persons into the labour market. In addition, several measures, concluded after negotiations with the government, have been implemented since January 2009 in order to adjust the policies to the impact of the economic crisis on the labour market. Besides social protection measures, currently there are three government programmes focused on alleviating the impacts of the global economic crisis on the labour market. The programmes impact the CEAs by providing extra funding during the crisis. Local context The interviewed County Partnerships in Vaslui and Tirgu Mures cover all important county stakeholders, more or less under the lead of CEA (Tirgu Mures) or the County Council (Vaslui), i.e., social partners, universities, social assistance public service, the Prefect directorate for employment, the school directorate, labour directorate, statistics department, representatives of SME`s and others. The Directors of CEAs are members of the Regional Pact, but this structure does not include an appropriate representation of the numerous communes, municipalities and towns within the counties. The local partnerships are keen to support regional policies that firstly promote employment and are a result of a broad consultation process. At the regional level MoLFSP took the initiative to foster development of regional plans of action for employment and social cohesion (PRAO). County authorities and social partners in each region have been supported by the national authorities to develop and adopt such documents. The institutional framework for the implementation of these subnational strategies and plans currently consists of eight Regional Pacts, 33 County partnerships, which are represented on the level of the regional pacts, local project partnerships and eight Permanent Technical Secretariats (STPs). STPs are supporting bodies for the Regional Pacts and for the County Partnerships, in order to design and establish sustainable projects on regional and local level and to provide other types of support. Elements of a local employment strategy have been outlined in both counties, i.e., promoting active employment measures with emphasis on EU-Funding. Concrete measures such as organising job fairs, providing consultation services, pre-selecting candidates at the request of local employers, offering subsidies to employers for hiring unemployed according to the approved budget; identifying training opportunities, supporting employers to hire graduates and the promotion of businesses in rural areas have been implemented. From a strategic point of view it is crucial that the county-level employment strategy is included in the development plan of the county. However, a coherent active county employment strategy linked to the National and European Employment Strategy has yet to be developed either in Vaslui or in Mures County. There are various examples of good practices in both reviewed counties to build on. High competencies in trans-national and international project development and implementation have been identified. For example, the Vaslui County Council in cooperation with the School Inspectorate (and other actors) acquired and conducted 32 lifelong-learning (Grundtvig, Comenius) and cross-border projects with international partners within the last two years. In Tirgu Mures and other counties of the Centre Region, partnerships with Italian actors resulted, for instance, in a project New employment opportunities in rural areas (teleworking) financed by POSDRU (98%) and national means of the CEA (2%). Furthermore, the following projects are worth
12

Source: POSDRU 2007 2013, Official Draft, MoLFSP, January 2007, p. 90-95.

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mentioning. In Vaslui county: (i) the Job Club for graduates conducted by the CEA, (ii) a 12 months scheme in temporary publicly subsidised work - the city hall occupied 450 unemployed receiving 70% of the salary from the CEA, (iii) job fairs organised by CEA three or four times a year (iv) Comenius and Grundtvig Programmes (EU-schemes of the European Union in the field of Life long learning) School Inspectorate and County Council with international partners to combat early school leaving and improve access to vocational training (v) a EUR 27 million road infrastructure project with impact on the local labour market (vi) case studies of the two poorest communes of Vaslui and Botosani conducted by STP Vaslui. In Tirgu Mures: (i) industrial park providing 3 000 jobs and a business incubator (ii) micro credit programme for rural areas, revolving fund for start-ups, financed by the Suisse government (iii) Brasov county programme for long-term unemployed (40 people were tailor-made trained for five companies, 8% of them could be placed) (iv) telework centre based on an Italian (Turin) transfer project. Yet, there seems to be an issue of overview and availability of information on project activities and results. The overview of projects on county and regional level could be improved by setting up a web-site including an online database, which provides all projects with their current status (planned, approved, delivered, terminated). Main local labour market challenges The main labour market challenges have been identified in both counties. Vaslui county has the highest proportion of persons with a low level of training within the total of employed population (preliminary report). The vast majority of job seekers live in rural areas, completed secondary level of education, are skilled in areas no longer so relevant to the economy and many of them are older than 45 years. A weak infrastructure leads to additional problems. In Mures the County Partnership defined in a brainstorming process (round table) the most demanding challenges on the county labour market and formulated some elements of a local employment strategy. These are: (i) the SMEs providing the majority of jobs should be strongly supported; there is a lack of financial and legal support for the enterprises, the access of SMEs to the credit market should be improved (ii) the need of subsidized incompany training to maintain jobs (for those companies not being able to finance training on their own; usually only multi-national companies are able to pay for staff training) (iii) increasing the employment in rural areas is on top of the agenda (iv) demographic imbalance as the young people are leaving the county and this needs to be tackled by job creation and an entrepreneurial spirit (v) the differences between local areas are not considered enough in the national and regional employment strategy (vi) lack of adopted vocational schemes for graduates (vii) the capacity to operate efficiently in the county partnership has to be improved. The main target groups for active employment measures according to the POSDRU are the people on subsistence farming, the young unemployed and in particular the long-term unemployed13. Consequently active employment measures for the inactive population is one of the three major intervention areas and a central objective of financing within the POSDRU (34% of the entire budget). The Vaslui County defines (registered unemployed) graduates and older workers (45 plus) as main target groups at the moment, Tirgu Mures County mentioned illiterates, Roma and early school leavers as most hard-at-risk groups. It shows that the counties are able to define their own target groups (specific county target groups) which are in accordance with the national framework and the POSDRU. Besides young and long-term unemployed, the ageing workforce as well as in particular the older long-term unemployed (45 or 50 plus) should be considered as an important target group with special awareness in the national, regional and county strategies. During the last years, Romania already made an enormous progress in increasing the employment rate of older workers (55 to 64
13

According to POSDRU the number of long-term unemployed has remained relatively constant during the last years, the registered rates are above EU average and special attention will be put on this groups.

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years old) from 38.1% (2003) to 43.1% (2008) (Source: Eurostat). This development should be enhanced and continued by preventive employment programmes and measures for older workers and older long-term unemployed. In implementing this approach, gender gaps should be taken in consideration: the employment rate of women, in particular of women older than 50, is lower than the employment rate of men. Women are still going in retirement 5 years earlier than men. That seems to be a relict of former early retirement strategies not being in compliance with the Lisbon strategy. The lack of employment of skilled older people results undoubtedly in a lack of productivity in Romanian companies and causes high pension and social costs for the state. A more flexible pension age, initiatives to foster a positive motivation of employees (that they are able and willing to work longer) and special programmes to re-integrate older long-term unemployed and inactive people into work is recommended (see below Perspective 50plus: Employment Pacts for older long-term unemployed in the regions). Special attention should also be paid to the unregistered unemployed who have been estimated to the same amount as the registered (Vaslui: 20 000 registered and roughly 20 000 unregistered unemployed in the county). In 2009, several measures have been negotiated with the government and implemented in order to adjust labour market policies to the effect of the prevailing economic crisis. Besides social protection measures, there are three government programmes focused on the crisis in the labour markets: firstly, within a pre-dismissal scheme companies can apply for an exemption from social security contributions and taxes for three months (in 2009, over 5000 companies benefited from this facility for around 260 000 employees are involved). In a second scheme, called Money to complete the team 50% of the salary of new employees can be subsidized under certain conditions and for special target groups (EUR 61 million) and, thirdly, Money for Training provides additionally EUR 56 million fo r the training of certain vulnerable groups. Despite this, NEA expects 16 000 additional dismissals. There is a limited awareness of the above mentioned national crisis programmes as it seems that there is not enough promoted. Nevertheless, the CEAs provide counselling, in-company training, job creation and transfer measures for companies which are considering the option of reducing their work force. These measures aimed to ensure the respective employees are kept in employment. Yet, as a result of the crisis, financial restrictions on county level are obvious: The CEAs in Vaslui and Tirgu Mures complained about enormous lacks of financial and personnel resources that hamper their ability to achieve their objectives. In particular the county partnership and the CEAs demand more financial resources for analysis work and for training measures, especially for graduates and other specific target groups. Modernisation and capacity development issues concerning the public employment service One of the major issues of the modernisation of the public employment service, according to the Priority Axis 4 of the POSDRU, is to create individual action plans for unemployed people and to offer them a professional service with high quality. In Vaslui county about 50 counsellors (from a total of 58 employees) for 20 000 registered unemployed are employed in Tirgu Mures 25 counsellors (from a total of 39 employees) care for 16 000 registered unemployed. This means the ratio between counsellor and unemployed person varies between 1:600 or 1:70014. Under these circumstances it seems very difficult to set up appropriate individual action plans, as foreseen in the POSDRU, and have an intensive contact with the unemployed as a mechanism for better labour market integration. A major issue for the CEAs is the forecast of labour market development. For instance, in Tirgu Mures local companies have been asked by a questionnaire what kind of jobs they will offer in the
14

Respective ratio in Germanys Jobcentres after the modernization of the Public Employment service 2003 - 2005: 1: 75 for young people under 25, 1:150 for adult persons. It should be mentioned, that in reality currently the ratio is still often 1: 150 for young people and 1: 250 for adults.

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future (next two years). The idea is to mitigate unemployment and to organise tailor-made training according to the needs of the enterprises. This strategy may lead to disappointments because recruitment and personnel development plans of companies are often short-term orientated. Moreover, SMEs as the main job creators usually do not provide such plans and figures. It might be useful to study trends on the labour market on county level or to co-ordinate together with single companies that have concrete recruitment requirements. From the expert discussions it was reported that there is a lack of sufficient knowledge and capacity on how to design projects and how to apply successfully at the higher levels, specifically to meet the eligibility criteria and to get projects focusing to the local needs approved. The current predominant strategy is to apply for big strategic projects which may reach strategic goals and enable a sound flow of ESF-means, but at the same time might not be completely connected with the real needs of the localities. Furthermore there is a lack of transparency and monitoring. Nobody on regional or county levels seems to have an overview with regards to the planned, the ongoing and terminated employment projects in the counties. Project development and applying for project funding is predominantly based on the work of private consultancies that offer professional and fee-paid consultation. It seems that applications have been directly submitted to the responsible bodies on the national level, without being consulted or agreed by County partnership. Moreover, the national budget lines are defined along funds and Priority axis (POSDRU) in a vertical pillar (or silo) structure, but there is no horizontal budgeting platform for the regions. This is a barrier for project planning and development on county level because the information about the potential amount of funding available for the county is unavailable. Even on regional level it seems to be unavailable. The lack of resources on the side of the CEAs so far could not be compensated by resources of the POSDRU. For instance, it appeared impossible, to set up training measures financed by ESF in order to fill up the gap, caused by the fact, that the CEAs ran out of money, even if enough resources on side of the POSDRU might be available. A better access to the POSDRU could solve this problem, for instance, by using ESF financing to contract training providers to train the unemployed registered at the CEA. More generally, the integration of financial resources at county level is a challenge for all local partnerships, because the national or European funding bodies and the available programmes are mostly organised in a silo or pillar structure. However, combining different resources and funding streams at county level is often easier than at national level. Integrating different resources can be seen as one of the major factors of successful local economic and employment development. The county councils in Romania (and the county partnerships) principally have the (legal) power to absorb the resources from different National, European and international funds and to use them for financing programmes and projects designed and developed at county level. Romania local county councils should consider enacting this approach to advance local development objectives More generally communication problems have been identified between the different levels of governance. The complexity of legislation and structural fund rules are asking or expecting too much of the County Partnerships. Even more important is that approvals and financial resources are delayed. That discourages local actors and leads to mistrust and frustration. Addressing these problems, the CEA Tirgu Mures proposed to hire an expert or a permanent expert team specialised on POSDRU/ESF in order to improve the situation and make better use of POSDRU. In other EU Member states private temporary work companies play an important role by absorbing long-term unemployed and placing them into jobs. In many cases the temporary work leads to permanent contracts. It should be reflected on whether this could be an option for Romania to stimulate labour market participation and to achieve better results in particular for long-term unemployed. The dialogue between private companies, the county partnership and the public bodies should be enforced and supported by the social partners or county based associations of SMEs (or 45

similar organisations). Frequently private companies are not strongly committed to partnerships because they use a different language, represent a different culture and they rely on other decision making processes than the public bodies. Therefore the added value of local networking should be addressed in a language the companies can understand. That the process offers them a win-win situation not only in terms of financial subsidies but also by taking in account their special needs and interests. It is important to understand that the regional and local needs cannot be established by centralised instruments only. There need to be some degree and kind of flexibility to allow for local action. One such flexible measure would be to provide CEAs with a 10% free budget (see the Perspective 50plus: Employment Pacts for older long-term unemployed in the regions example below). In Germany in 2008, after a controversial debate at different political levels, the new Paragraph 16 f was implemented in the Social Code II. According to this Paragraph, the Jobcentres have the power to spend 10% of their budget for active employment measures on their own priorities, independent from central instruments and top-down performance indicators. Local employment agencies, Jobcentres, in Germany can use the money for innovative and local oriented employment measures without asking the higher layers for permission. More simplification is needed in the current performance management system of CEAs whose work is steered by 13 annually up-dated performance indicators. These indicators were established after a consultation process between authorities at the national and county level. The possibility of reducing the number of indicators in order for more transparency, simplification and to downsize bureaucracy should be considered. In addition, to assure an appropriate provision of the CEAs is use for active employment measures, a distribution of financial means according to a problem-orientated indicator is recommended. In Germany the annually distribution of financial means from the National Ministry of Labour and Social Affairs and the National Employment Agency (NEA) funds local employment agencies (or Jobcentres) and it follows a so-called problem-orientated indicator. This indicator takes into account the number of persons who are registered and simultaneously able to work in each Jobcentre. In addition there are some other variables influencing this indicator which describe the labour-market problems in a given region or local area. As a result, localities with high labour market problems and a huge amount of registered unemployed receive more money than better developed localities. This system ensures that the regions and localities lagging behind receive the money they need to tackle these issues. Currently there is a debate about whether to combine this indicator with a success- and efficiency orientated indicator in order to achieve a better balance between problem-orientation and success. Partnering for local employment According to some interviewees the most demanding challenge seems to be the implementation of preventive and active employment policies and measures on the county or local level. The representative of the Managing Authority on national level stated: Partnerships are there but how do we improve their capacity to launch appropriate projects? Some answers and elements of a revised strategy will be outlined in the following paragraphs. The CEAs should overtake an active role in the decentralisation reform process by being a coordinator and leading network partner on the county level, according to the POSDRU, Axis 4. Therefore, the institutional capacity of the CEA to do this work should be supported, through training of the directors and certain staff members. In addition the principle of partnership on county level should be further developed. STPs can serve as a body to support this process. (This role for STP has been expected by the county partnership members). Positive steps in this direction have been identified: STP for Vaslui (and other counties) sent, for instance, a questionnaire to the majors of the 46

communes in order to collect important data for local employment development as a prerequisite for projects on local level (commune level). Moreover, they identified the two poorest communes in the counties of Botosani and Vaslui and implemented two studies in order to find out the causes of this stagnant situation. The representative of the IB for Vaslui County set up an initiative for networking at the level of the communes (majors) stating that the cooperation at this level between the local authorities is more important than the cooperation in the county partnership. Such initiatives should be expanded, enhanced and supported by the county, regional and national level and further developed to be part of a systematic approach ensuring the participation of the local areas (such as communes, towns, municipalities) in labour market and employment issues. In order to design and develop projects, which are adapted to the needs of the local areas, should be enhanced and supported by the higher governmental levels. One interviewee said: If you do not offer something to the county partnerships and to the local stakeholders they will never be committed. The county partnerships and in particular the CEAs should not be seen only as executing bodies of national strategies. A real decentralization process in the direction of good governance includes a shift of decision making with enhanced degree of freedom in priority setting, projects planning, monitoring and (pre-) selection of projects to the county partnerships, not only to the regional level. Moreover, the regions are too big (geographical distance, diversity of the counties) to implement a local employment strategy on the basis of regional pacts. Nevertheless, a new approach in the direction of shifting decisions and tasks to the lower levels (county level and the communes, municipalities and towns) could be embedded in the given national, regional and county partnership framework. Participation and real commitment at the county and local level will emerge as soon as the county partnerships have the right and the duty to decide (in a given framework). The Romanian Government, the MoLFSP and the NEA should be encouraged to follow such a strategy. On the one hand, it might be difficult to implement a systematic bottom-up approach, integrating the local level of communes, municipalities and towns, because of the sheer number of the respective bodies (Vaslui: 3 municipalities, 2 towns, 81 communes; Tirgu Mures: 4 municipalities, 7 towns, 91 communes). On the other hand, the most vulnerable or hard-at-risk (or hard-to-reach) groups in terms of labour market, such as Roma, people in undeclared or unprotected work, inactive people, long-term and unregistered unemployed, are best dealt with (or appear) at this local level, in particular in rural areas. It is necessary to change the given structures by involving the majors and other important local stakeholders. This will enhance the ability of the existing structures in order to reach and to activate those vulnerable groups with the objectives of finding pathways for better access to the labour market and fostering social cohesion and inclusion. In this respect the recommendation is to launch a call for proposals at the county level targeting and addressing the local municipalities, communes and towns with promotion/ dissemination activities. A balanced equilibrium between competitiveness and cooperation should be envisaged between the various entities. The call should be properly prepared by raising awareness in the communes, by gathering data of local areas (which may be partly already available through the different departments and units of the county administration), by additional analysis and study reports, by setting up a county related employment strategy which will define objectives, fields of activity and potential target groups. The objectives will be cross-checked with the National (Priority Axis POSDRU) and Regional objectives. The Regional Pact, the Regional Development Agencies, the Intermediary Bodies and STPs should support this process by ensuring that funds are available and eligibility criteria are clear. In a first step only project ideas might be submitted (by local stakeholders, training institutions, local NGOs or SMEs) to the county level. In a second step STPs should be able to translate these ideas together with the potential applicants - into eligible project applications that are in compliance with the overall national strategy and the priority axis of POSDRU (or other 47

available funds). In a third step the county partnership selects on the best and eligible projects submitted by eligible bodies (NGO`s, training providers) in cooperation with the responsible local authorities in the given commune, town or municipality. The main pre-selection criteria may include firstly, that the proposals respond to the local needs and secondly, that they address specific vulnerable groups in terms of labour market participation. In a fourth step the county partnership submits the county approved package of projects to the National bodies (maybe via the Regional Pact or the IB) in order to receive the final approval for launching the projects. Through such a strategy, passive beneficiaries or non-involved local authorities and NGOs would become active players on the local and county labour market. Partnership is not question of quantity (the most important stakeholders are just on board), but a question of quality of communication, of know-how in local employment development, of trust, accountability, of leadership, of support from higher levels, of readiness to overtake responsibility and of sound decision-making and agreement processes. It is important also to develop a future oriented vision and thus on that grounds, the objectives of the county partnerships should be worked out together at county level - with professional help. The stakeholders and actors on the county level criticised the responsible people in the administrative bodies, like the CEA and others, and which also has a high staff turnover very often, due to electoral processes. This leads to a lack of sustainability and causes severe communication problems. In order to cope with the problem of the continuous and unforeseeable change of personal and to gain more stability for the partnership it might be useful to transform the County Partnerships into legal bodies (for instance as an association). In this case not only personnel representatives but official entities would be members of the Regional Pact. Learning models Note on the relevance of learning models On a first and superficial glance, there may be doubts if the German example can contribute to the Romanian situation and in particular to the Romanian employment strategy. The economic situation and the budgets available for labour market policies may differ in a ways that appear not to be comparable. However, major parts of former East Germany and one region in the former West Germany are still convergence regions, plus some other parts of Germany are defined as phasing out regions. The unemployment rate in Germany differs between about 5% in Bavaria and BadenWrttemberg and 11% to 14% in the Eastern part of Germany and in some regions of West Germany. Berlin, the capital, ranks with more than 14% at last amongst the German Lnder (regions) whereas Vaslui county (with the highest unemployment rate in Romania) has an unemployment rate of 11.3% to date. During the 1990s, Berlin, the German capital, suffered around 300.000 job losses in the industrial sector a loss of economic power which is similar to some Romanian counties which suffered also an enormous industrial decline. The issues of demographic change and an ageing workforce, the challenges of migration within the country (for instance, many young people leave the East Germany seeking new jobs in West Germany leaving a growing ageing population and a lack of skilled workforce, in particular in remote rural areas of the East) and from abroad, the topic of longterm unemployment and poor neighbourhoods, youth unemployment, transition from school to work, early school leaving and the challenge of designing and implementing a sound active employment strategy to meet this problems by involving simultaneously the regions and localities, are factors, that affect both countries. Germany today might not be comparable in terms of economic development and in terms of budgets provided for active labour market and employment measures. Instead, with regard to structural change, the method of how to cope with unemployment and employment challenges, the structure of different programmes targeting unemployment, the local employment strategies, the institutional framework of the Public Employment Service (PES) and the way of adopting the Lisbon

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and European Employment Strategy, there are obvious similarities and a basis to learn from each other. Short-term work and transfer-short-term work scheme combined with further training
Key actor to follow-up: Type: MoLFSP Short-term model to tackle the economic crisis on the labour market

Rationale and general description (budget, people, accountability structure and partners) In Germany the most important and most successful instrument preventively combating the crisis on the labour market is the so-called short-term work scheme. The rationale behind is, that reducing employee working hours in the midst of a bad economy enables an employer to keep employees on board even if the company is not receiving enough orders. Instead of laying people off, employers can apply to the public employment service (Federal Labour Agency) for financial support in the form of a so-called short-time allowance. Compensation is also available for two specific types of short -time work besides that attributable to a recession: seasonal short-time work (as in the construction industry) and short-time work due to business restructuring (called Transfer- short-term work, see below). The German government and the Federal Labour Agency have put together and financed a rescue package for businesses of all sizes, called Short-time work and further education moving out of the crisis and into the future (Kurzarbeit und Qualifizierung - aus der Krise in die Zukunft). Since 1 February 2009 the countrys second economic stimulus package has made it easier for more businesses to receive government aid. The second economic stimulus package has extended the period during which compensation can be received for short-time work to 18 months. Compensation equals 60% of the reduction in net pay, or 67% for employees with one or more children. Some companies stock up to 70% to 90% of the net salary depending on contracts or agreements with the work council or the union of the respective branch. Training and further education can be offered to the employees during the period of reduced working hours. Participation in skills training does not rule out the possibility of increasing working hours or returning to full-time work. This scheme can also be subsidized by the state. In particular the further education for low-skilled workers is fully subsidized by the state and by the ESF. The Federal Labour Agency defines unskilled workers as those who have not completed vocational training and those who have completed such training but have been working in an unrelated or unskilled position for at least four years, or those who are no longer able to perform the work they were formally trained to do. Skills training must take place during normal working hours and must not last longer than the period of reduced working hours (funding is initially limited to training programmes beginning in the 2009 calendar year). Aid covers all costs of the training and includes allowances for transportation and childcare costs. Employers providing skills training during a period of reduced working hours are guaranteed full repayment of social insurance contributions during that time. Further education must provide trainees with skills that they can use in the general labour market, in particular such skills that improve their professional qualifications, and should, if applicable, conclude with an official certificate. In-house seminars held by company instructors are permitted in special cases. A distinction is made between general and specific training measures. General training is defined as training that does not exclusively or primarily relate to the employees current or future position in the company being funded, but rather provides qualifications and skills that can be transferred to other companies and other fields.

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Specific training is training that is primarily related directly to the employees current or future position within the company. Training measures must be completed in the period during which the short-time allowance is received. In-house seminars held by company instructors are permitted. Training measures must begin no later than 31 December 2010.

Reduced hours and further education are two useful instruments that open up new perspectives for people working at companies that have suffered as a result of a decline in business. Government aid in the form of short-time allowances helps companies temporarily reduce personnel costs and avoid layoffs. It also helps keep intellectual capital within the company. Aid that covers the cost of further education helps companies use reduced working hours to their advantage and gives employees a chance to upgrade their skills. Special scheme: Transfer-short-term work due to business restructuring in autonomous entities or transfer companies In case of unavoidable redundancies or lay-offs there is another scheme in Germany. Based on Social Code III this scheme is to help companies to reduce costs and supporting employees made redundant by transferring them into new jobs by avoiding unemployment. In this scheme, affected employees are still employed by the company threatened with closure (or in a transfer company), but do not actually work there. For companies that have to lay off workers under certain conditions the short-term work scheme (see above) can be expanded to become a safety net for the companies employees. In these cases, the company and the relevant union must justify why the company is to be considered for the scheme and must apply for Transfer-Short-term-work-allowances (60% to 67% of the net wage or salary). If the justification is accepted by the competent authorities, the employees threatened with dismissal are safeguarded in a so-called autonomous entity within the enterprise or in a transfer company outside of the enterprise provided by organizations specialized in the field of outplacement (see contact details). The employees that join the entity (or transfer company) continue to receive their wages and salaries, but only up to the amount which they would be paid in case of unemployment. The crucial point is that the company continues to pay social security contributions to these employees. Thus, while the wage is being subsidised by the local employment office, the social security payments are financed by the company. The period of work-time-zero is used for individual and group counselling, further training, internships in new companies and other activities targeting at acquiring a new job. Why is the initiative a good practice? In Germany, currently 1.4 million employees participate in the scheme. According to research, 500 000 full-time working places have been saved by this scheme during the last year. The short-term work scheme has been supported by the European Commission in June 2009 and has been recommended to other Member states. 11 member states have adopted the programme. In terms of budgeting it is crucial to notice that the amount of the short-term-allowance is the same that otherwise has to be paid as unemployment benefit. Thus, it does not really cause additional costs for the Public Employment Service. Whilst the first scheme (short-term-work) has approved successful to maintain jobs, the second scheme (transfer-short-term work) is appropriate in the case of closure or downsizing of a company in order to transfer the affected employees to new jobs by avoiding (long-term) unemployment. Framework conditions that make the initiative work In Germany the short-term work scheme is integrated in the social code III (SGB III: legal foundation KUG 172 SGB III and thereafter). Probably in Romania a legislation process has to be 50

implemented in order to apply this scheme and this can cause political and time-related problems. The scheme could be seen as an evolution of the already existing pre-dismissal scheme in Romania which exempts employers from social insurance and taxes payments for three months. Contact details For more information on the short-term work scheme, please contact: Gabriele Fellermeyer; Gabriele.Fellermeyer@lnbb.de and Esther Kramer; Esther.Kramer@lnbb.de. For more information on the transfer-short-term work scheme, please contact Siegfried Backes; siegfried.backes@personaltransfer-gmbh.de Perspective 50plus: Employment Pacts for older long-term unemployed in the regions
Key actor to follow-up: Type: MoLFSP and Regional Pacts Mid- and long-term strategy to raise employment of older employees and to re-integrate older long-term unemployed into the labour market

Rationale and general description (budget, people, accountability structure and partners) The exclusion of 50 plus (long-term) unemployed persons from the labour market is no longer tolerable. According to the Finish Scientist and founder of the Work-ability-index, Prof. Illmarinen, currently only half of the 55 to 64 old population of the world are participating in the labour market. While in Europe 1985 25% of the working population was between 15-24 years old and another quarter between 55-64 years, by 2025 35% will be between 55-64 years old and only 17% between 1524 years. A crucial problem, in particular in Germany, but also in Romania and many other EUcountries, is the increasing amount of older long-term unemployed. Thus, during the last years, demographic change has become a high priority issue for the public and the government in Germany. The Ministry of Labour and Social Affairs in Germany has therefore implemented a specific strategy to promote more and better employment for elderly people, including both the Perspective 50plus Programme and other measures such as an increase in the pension age to 67 until 2020.
Table 6. Employment rates of older employees 2003 and 2008, Germany - Romania Germany 39,9% 53,8% 31,6% 46,1% Romania 38,1% 43,3% 33,3% 34,4%

Country 2003, total employment rate 55-64 years 2008, total employment rate 55-64 years 2003, female employment rate 55-64 years 2008, female employment rate 55-64 years
Source : Eurostat.

The Perspective 50plus Programme (www.Perspektive50plus.de), addressing the regional aspect by launching regional pacts. The people supported by the specialized Perspective 50plus Programme are predominantly the low- or semi-skilled long-term unemployed. The 438 jobcentres (i.e. new established local employment agencies for long-term unemployed and former social welfare recipients) and local authorities that have been responsible for long-term unemployed in Germany since 2005 (following the so-called Hartz IV legislation act) find the activation and integration of long-term unemployed over 50 a particular challenge. The focus of the Perspective 50 plus Programme is raising awareness on this issue, changing the attitudes of employers and enterprises e.g. through public campaigns, re-activating and reintegrating the 50+ group, evaluating impacts, and identifying and mainstreaming best practices and innovative tools. The regional employment pacts for older long-term unemployed aim to involve all appropriate regional and local actors to assure more and better employment of older workers, and to find new strategies and instruments for a better 51

integration of this group into the labour market. This new form of regional co-operation takes a crosssector approach: including labour market, employment, social and health policies. The regional pacts use a wide range of different tools and instruments, including profiling, assessments, special training measures, internships in companies, placement activities (adapted to the special needs of the target group and to the region), wage subsidies for enterprises, time management, and publicity campaigns to raise awareness of the challenges of demographic change. There is also a commitment to developing better governance of the issue (at local and between local and national levels). The first phase of the Perspective 50plus Programme was implemented from 1 October 2005 till 31 December 2007. The phase 2 has been running from 1 January 2008 until 31 December 2010. The main partners at the federal level are: the Ministry of Labour and Social Affairs, 292 Jobcentres or local district authorities, and the IAQ (Institut Arbeit und Qualifikation of the University Duisburg-Essen) and IAW Tbingen (Institut fr angewandte Wirtschaftsforschung e.V.), which are responsible for the national evaluation of the Programme. At the local level the main partners include first of all: small or micro-enterprises; large companies and SMEs, training providers, chambers of commerce and crafts, consultants and intermediaries, charities, church institutions, employment agencies, politicians, health insurances, scientific institutions and universities, and other public and private bodies: all important local stakeholders in employment issues and demographic change. The regional or local pacts contract external institutions, such as agencies, consultancies, private placement services and publicly financed NGOs. Sometimes the pact sets up a public-private partnership (PPP). Most of the 62 pacts, which were approved by the Ministry of Labour and Social Affairs in autumn 2005 have created steering committees involving the most important local and regional actors. The lead partners are the Jobcentres or local authorities in the regions, who often commission an intermediary to act as project manager. A half of the pacts (31) have commissioned universities and other scientific institutions to carry out formative evaluation of the respective pact. The diversity of the approaches supported by the federal Perspective 50plus programme is remarkable. Some of the projects aim to enhance collaboration between the regional actors to create more jobs for older workers by founding regional associations and forming regional alliances. Other pacts focus on directly addressing employers and specifically encouraging them to hire older workers. Others again pursue a core idea, for instance by consciously linking environmental policy objectives with labour market policy measures, e.g. in the housing or the renewable resources sectors. Last, but not least, some of the pacts test new instruments or experiment with an innovative combination of instruments, resulting in effective integration strategies for older workers. The total sum of pact financing, without consulting-, monitoring - and evaluation costs of the programme, amounts to roughly EUR 200 million for the two-year implementation (2005-2007) phase. The second phase covers a planned budget of EUR 450 million for 2008-2010 (Target: 300 000 activated long-term unemployed, 100 000 persons integrated into Jobs). During the first phase (20052007) more than 22 000 persons with an average unemployment duration period of four years had been integrated into regular jobs. In the first phase a broad range of new instruments had been developed, such as progressive wage subsidies, learning duos: young guides old, regional employment and growth funds for demographic change, best-agers-campaigns, a special coaching scheme for business start-ups by older unemployed people, healthcare, housing and tourism projects. The second phase (2008-2010) is strongly orientated to activation and integration targeting at sustainable jobs for older long-term unemployed. The new ideas developed in the first phase have been partly mainstreamed in the second phase. The regional pacts expanded from 93 involved jobcentres (2005) to 292 jobcentres (July 2009). For 2010 further regional expansions are planned.

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Why is the initiative a good practice? Former early retirement schemes have become a burden for both employers and employees because a majority of employees now envisage a retirement age of well beyond 65, and companies tend to dismiss older employees, usually hiring people aged between 25 and 45. The German government launched the Initiative 50plus to combat unemployment of older people, to aim at maintaining employees longer in jobs and re-integrating the long term older unemployed into the labour market. Due to the efforts of the last decade, the employment rate of older people (age 55-64) in Germany was over the Lisbon target of 50% in 2008 and reached 54.9% in the 1st quarter of 2009. For the German Federal Ministry of Labour it was the first time after a long tradition of centralised instruments to implement a new approach addressing directly the regional level. The programme is financed by the Ministry of Labour while all former programmes and centralised instruments have been financed by the Federal Employment Agency. This new strategy has been very successful so far. It was already in 2006, after one year of programme implementation, that the Minister for Labour and Social Affairs, Mr. Mntefering, stated in a press conference: The pacts show what's needed for success: that industry, trade unions, joint agencies, local authority agencies and the actors in the regions pull on the same rope, with all their strength and in the same direction, to create more jobs for older people. To date, according to the statistics of the jobcentres and the evaluation outcomes, notable results can be reported: from 2005-2007 22 000 long-term unemployed (four years of unemployment on average) have been placed into new regular jobs (with full social insurance and at least for 6 months). In the first year of the second phase (2008-2010) another 19 000 unemployed older workers had been integrated into regular jobs. Despite the economic and financial crisis, the first months in 2009 show the same tendency. Thus, it is expected, that the challenging target of 50 000 job placements for older long-term unemployed will be reached at the end of 2010. Another success factor, confirmed by the evaluation, is the clear definition of the few indicators connected with a free budget and a consequent simplification of administrative rules. Moreover, the Programme pushes forward an institutional reform. The favourable ratio between the mediator at the jobcentre and the client (1:150 instead of 1:300 in the regular scheme), for instance, enhances the transfer of outcomes of the Prospective 50plus initiative to other target groups and to other departments of the jobcentre, i.e. the success of the Programme encourages the management of the jobcentre to take institutional reforms not only for the age group 50plus but also for the entire organisation. To summarise it: The project seems to represent a new approach in the German labour market policies which may be change or at least challenge the traditional, centralised system. Framework conditions that make the initiative work The most important factor is that the responsible bodies and persons recognise the demographic change, the topic of an ageing workforce and in particular the situation of the older long-term unemployed as a crucial challenge to labour market and employment policies. While young people usually are better educated in terms of modern professional skills, like IT-skills, older employees show a high performance through experience, in-depth knowledge, accountability and commitment to work. These are assets for raising competitiveness and productivity in enterprises that should not be overseen. In Romania special attention should be paid to women older than 50 years, because their employment rate is quite low and stagnating during the last years (see Table 5 above). Raising the employment rate of women and in particular women older than 50 years, is a main route to increase the overall employment rate in Romania. The Perspective 50plus Programme provides a framework especially for the eight regional pacts in Romania. The advantage: while in Germany regional pacts 53

had to be established for the special purpose of raising the employment rate of the 50+ age group, in Romania they are already existing. The above described initiative could be piloted in one or two of the Romanian regional pacts. In terms of financing the POSDRU may offer the appropriate framework because the demographic change, the challenge of long-term unemployment and the age group 50+ is part of its reference. Moreover it is important that the regional pacts will have the power to adopt the Programme according to the regional and local needs and that the approach includes a simplification process of administrative rules. Contact details For more information, see www.perspektive50plus.de and contact Reiner Aster; Reiner.Aster@gsub.de Job Point. The direct way to your new job
Key actor to follow-up: Type: CEAs, local employment agencies, County Partnership Short and mid-term model to improve placement on local level

Rationale and general description (budget, people, accountability structure and partners) The Job Point is an open placement service transferred from Denmark (Job -Buttiken model) to Germany within the European IRES-project (Improving Regional Employment Services, 19992002). Main objectives of the IRES-project were to improve and increase the range and quality of services offered by regional and local employment services in each of the partner regions by (Opole, Poland; Viborg, Denmark; Berlin, Germany), capacity building, the improvement of the tools and instruments in the labour market policy (Open Placement, encouraging business start-ups etc.), exchange of experiences and results of special programmes and exchange of best practise projects (benchmarking). A methodology of labour market diagnosing was developed and adopted as tool for monitoring the labour market employment needs. IRES further set up a Training and Counselling centre in Opole (Poland) that serves as a permanent base of courses, workshops etc. It established a solid platform of exchange of international experiences and adapting solutions to particular regions. These regions co-operate on the preparation of an institutional network capable of managing workforce flow in accordance with the European Standards. A further result was the opening of a Job Point in Berlin-Neuklln, which is still up and running to this day, seven years after the closure of IRES. Here job vacancies are presented to passersby and visitors, many a job seeking but not necessarily unemployed. The Job Points are often more efficient then the local employment agencies due to their unique structure and ad-hoc reaction potential; up to 600 new jobs are on display every month, of which roughly the half can be filled. The Job Point in Berlin-Neuklln is a modern and open job placement service, which appeals to businesses and jobseekers alike. The service accurately and efficiently matches jobseekers to jobs. Employers and jobseekers meet each others directly. At the Job Point, job vacancies are presented to the visitors on display boards. Companies register their job offers with the Job Point at short notice, ensuring they immediately reach a large number of motivated job seekers. Job Points are set up in busy shopping streets or malls, according to the idea of taking what we offer to the people. The latest job offers are presented on display boards that can be viewed during shopping hours. Visitors to Job Point will find bulletin boards with job listings. Employers use Job Point to publish openings that they want to fill immediately so they can reach a maximum number of motivated jobseekers. Visitors can contact potential employers directly in the Job Point by phone or email. Computer terminals are provided where visitors can search for jobs in the Internet or write

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application letters straight away. Companies can forward their job offers to the Job Point easily and not bureaucratically. The job immediately goes on display and is published in the Job Point website as well. If the job is subsequently taken, the employer simply has to call and the job is no longer displayed at the Job Point. The Job Point Neuklln project is funded by JobCenter Neuklln (local employment service), Agentur fr Arbeit Berlin Sd (the labour agency for south Berlin) and the Senate Department for Integration, Labour and Social Issues (80% by the PES, 20% by the Land Berlin). The overall cost from April 2008 to March 2009 amount to EUR 450 000 (with seven full-time staff). Why is the initiative a good practice? From its opening in February 2002 until the September 2009 over 1 million people have visited the Job Point Berlin-Neuklln. 70 000 job vacancies in 6 000 companies were advertised, of which half could be filled. Over 600 new jobs are advertised each month. The Job Point Berlin-Neuklln is certified to DIN EN ISO 9001:2000. Below are the main results of an employer survey in 2008: The atmosphere is friendly and open. The openings that employers post at Job Point reach a large number of well-qualified, motivated applicants. It is easy to post a job opening at Job Point (a phone call, an e-mail, a fax or a personal visit is enough). Job listings are always up-to-date. The services are free of charge. Over 90 percent of companies surveyed said they were satisfied with the service and would recommend Job Point Neuklln to colleagues or friends. All job opportunities and other Job Point services can also be accessed on the internet (at www.Job Point-berlin.de).

The Job Point is an advantageous tool for employers, jobseekers and the Public Employment Service (Figure 5). Framework conditions that make the initiative work It is very important that the Job Point is located in a frequently visited area, like a shopping street or a shopping mall, because only if enough clients apply for the vacancies the employers will continue to post their jobs in the Job Point. The idea and working structures are highly transferable to urban areas throughout Europe, when the local circumstances are considered and the labour market stakeholders are involved. That makes the Job Point a real Best-Practice-Example with an explicit European value. In Denmark and in Berlin, the Public Employment Service is behind this idea using it as a completion offer to its own services. gsub offers advice and initial support in the establishment phase, including training of staff, furniture and common corporate design and a efficient database. With its principles and advantages of open placement, free of charge and cost saving, quick and time saving, self service and help-yourself principle the Job Point is a contemporary service which benefits companies as well as jobseekers. The Job Point expands the range on offer in shopping centres and shopping streets by adding an attractive, modern and innovative service. It can be 55

transferred to other Member states. Many visitors from abroad have been convinced of the advantages by studying this service. In 2008 a Job Point in Gelsenkirchen (West Germany) opened, modelled according to the Berlin Job Point. In Berlin more Job Points have been envisaged.
Figure 5. Job point advantages for employers, jobseekers and the public employment agencies
Advantages for employers Job offers can be posted free of charge. The employers are spared the burden of placing large, expensive advertisements in newspapers or elsewhere. At the Job Point the vacancies will be posted for at least two weeks and will be removed immediately on request of when the position is taken. The Job Point is an advertising platform for companies with more than 600 visitors a day. Advantages for jobseekers Quick overview of job openings in the region. They do not need to register and there is no red tape Job Point is a one-stop shop accessible to anyone. Jobseekers can apply for jobs right then and there (there are phones, job listings and PCs where you can write cover letters). The convenient opening hours (Monday to Friday from 9 a.m. to 7 p.m. and Saturday from 9 a.m. to 2 p.m.) are the same as those of the surrounding shops so you can stop by while you are out doing your shopping. All of Job Points services are free of charge. Advantage for Public Employment Service

Registered unemployed can be activated by sending them to the Job Point (self-search motivation) Additional job vacancies can be identified and offered

It is a self-service tool

No brokerage, but open placement with direct contact between jobseekers and employers Cost effective and efficient Positive image Transparency of the local and regional labour market

Contact details Ingrid Steinhagen, project leader; kontakt@Job Point-berlin.de http://www.jobpoint-berlin.de/index.php?menuid=77 (3.20 minute video in English on the Job Point)

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CHAPTER 5 PARTNERSHIP STRUCTURES FOR EMPLOYMENT DEVELOPMENT

Introduction Effective partnerships can have an influence on how policies and programmes are implemented locally, sometimes also on their design. The evaluation report of the last programming period (20002006) of the European Social Fund (ESF) has underlined the usefulness of partnership as governance instrument15. partnership can contribute to the effectiveness, efficiency, legitimacy and transparency of the structural funds operations and to the commitment to, and to the ownership of, the programme outputs. when well implemented partnership has generated improvement of institutional capacity at different levels (local, regional and national), a better institutional coordination and communication at national level and a better involvement of civil society.. Also the guidelines on Cohesion policy put a focus on the principle of partnership: ...measures and actions that are specifically needed in order to improve the capacity of MS in managing and implementing the cohesion policy. Sound and efficient management of the funds requires appropriate, effective and transparent structures in central and regional administrations....The effective use of the funds is also influenced by the capacities of the project holders to develop and implement high quality projects...related, and highly important, factor determining the effectiveness of cohesion policy is the quality of the partnership between all the stakeholders, including those at regional and local level, in the preparation and implementation of programmes...16 In the ESF regulation, working in partnership is mentioned in Article 3 as promoting partnerships, pacts and initiatives through networking of relevant stakeholders, such as social partners and NGOs, at national, regional, local and transnational level in order to mobilise for reforms in the field of employment and labour market inclusiveness.17 Public administration in Romania developed over decades in a centralistic manner. Participation in policy processes from lower tier government structures and non-state actors is therefore a young concept and still in development. Co-ordination and integration of different policy areas is at its starting point. A general problem at the sub-national level is the lack of autonomy that make de15

EC (2005) Partnership principle in the programming period 2000-2006 Analysis of the implementation of the partnership principle. EC (2005) Community Strategic Guidelines on Cohesion Policy in support of growth and jobs. ESF Regulation for the Programming period 2007-2013.

16 17

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concentrated services, such as CEAs, are very much dependent upon national level decisions. Hence, regional services are only beginning to appear. Yet, evidence based policy making at sub-national levels is difficult and much more needs to be done to establish systems of local development intelligence. Communication between different levels of governance is also not well established. Partnership structures at sub-national level, with the aim to increase participation in policy processes through local development intelligence and functioning communication channels is thus a promising approach in promoting local development. This chapter examines the current role of partnerships in local employment strategy design, implementation and evaluation, with a particular focus on the two regions and counties reviewed. It identifies and examines barriers to as well as good practices in local partnership work for employment development. Local governance in the design, implementation and evaluation of employment strategies During the pre-accession period, based on the attainment of the necessary requirements defined within the partnership Romania-EU, several PHARE projects have supported the development of new models and structures of governance, in particular the so-called Regional Pacts for Employment and Social Inclusion and the Regional Consortia for TVET.18 Linking socio-economic development planning with education and training and increasing participation in related policy processes are main objectives. The latter is facilitated through a bottom-up process that involves regional network structures and thematic working groups. Of key strategic importance for skills development at the regional level are the so-called Regional Plans for Education and Technical Vocational Training. The Romanian Ministry of Labour, Family and Social Protection, in its function as Managing Authority of the Operational Programme for Human Resource Development has established for a greater utilisation of European Structural Funds partnership structures, with the aim to: support the absorption capacity of ESF means at regional and local levels dovetail policy initiatives to regional and local needs foster capacity building and involve regional and local actors in a collective search for effective solutions to address development challenges

An assessment of the first generation (2006-2008) of Regional Plans for Employment and Social Inclusion (PRAO) involved partnership structures throughout the process from priority setting to implementation. This exercise brought to light that most problems at regional and local level are multidimensional in their nature and cannot be addressed by segmented policies. There is a need for stronger co-ordination and integration of policies within a holistic approach that can be advanced through the partnership approach which is multidisciplinary and multidimensional and brings in the regional and local level. Before looking into key challenges a brief presentation of the key partnership structures at regional and county levels the Regional Consortia and the Regional Pacts for Employment and Social Inclusion is useful for setting the scene for analysis.

18

Maria Joo Filgueiras-Rauch (2006), Final Report Phare project Support to the Ministry of Labour, social solidarity and family to design and implement employment policies. EuropeAid/119346/D/SV/RO.

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Regional Consortia During the pre-accession period a new administrative order was introduced at the regional level, creating as a result eight regions. In each of the regions a Regional Development Agency was established. These Agencies have been vested with responsibility for programming and planning for all policy areas at regional level. In shaping the regional development process an important step was made in defining a regional identity through social dialogue between the regional stakeholders which led to the above mentioned Regional Development Plans. For the specific policy areas working groups were established to enhance an inter-institutional dialogue and facilitate decision making. One of these areas was the technical and vocational education and training (TVET). Decisions concerning professional education and training involve the country and regional levels of governance. The main objective of these structures at regional and county level are to intensify the inter-institutional dialogue in education and training matters and to bring together the demand and supply sides in a medium-term planning process. The Regional Development Council is the main institution to lead the analysis of the structure and dynamics of the local labour market and to promote policies in response to identified needs. It is a consultative structure that advices the Council, on human resource development issues, in particular on TVET. It involves the relevant actors at regional level.19 The Consortium prepares the Regional Educational Action Plan (PRAI) which is used as reference document for educational and training issues in the region. The Plan links TVET issues into wider socio-economical development planning. At county level the Local Committee for the Social Partnership Development involves relevant stakeholders in education, reflecting the same structure as at regional level, in the drafting of the Local Educational Action Plan (PLAI), which links to the PRAI as reference document. Both the PRAI and the PLAIs are revised annually. The Romanian Ministry of Education and Research is supporting the capacity building of these new sub-national structures. The TVET directorate in the ministry intends to enhance the international exchange of experience as well as closer co-operation between the 42 Regional Consortia through two ESF-financed projects.20
In both regions, North East and Center, a Regional Consortia and local committees exist. Hence, Vaslui and Mures counties both have their own local structures for the TVET.

Regional Pacts for Employment and Social Inclusion The Regional Pacts for Employment and Social Inclusion have been establishment in 2006 as part of the PHARE project Support to the Ministry of Labour, social solidarity and family to design and implement employment policies. The main aim was to strengthen social partnership in employment policies in order to promote local employment potential and social inclusion on the labour market for vulnerable groups in order to tackle inequalities and discrimination. The project helped to create a partnership structure that encompasses the local, county and regional levels of governance. The
19

The composition of these structures can vary between regions since each Consortium is the product of a process that had been launched by the Regional Development Agency of each region. However the main actors, at least one per each county, are representing School Inspectorates, County Councils, Prefectures, CEAs, regional development agency, university and Local Committees for the Social Partnership Development, which is a consultative structure of the School Inspectorates at county level that is responsible for the Local Educational Action Plan. Planned are international study visits for the members of the 42 Regional Consortia to partnership model initiatives in Europe, and inter-Consortia exchange events to enhance collaboration on various TVET issues.

20

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Regional Pacts for Employment and Social Inclusion include also county and local level structures, which involve different stakeholders through agreement of collaboration, also referred to as declarations of intentions. The participation of a majority of relevant actors in the Pacts and the County Partnerships make those structures the most suitable governance tools for a more regional and locally tailored policies and measures. Structures at the regional level The Regional Pact has a clear leadership composed of a president and a group of vice-presidents, whose number varies from region to region. The main objective of the Regional Pact is to develop a vision for employment and skills development in the region. The Regional Pact was built and approved by MoLFSP with the competences to put this vision into strategic guidelines and priorities for employment promotion in the region in form of the PRAO. The Regional Pact is a sort of policy committee whose aim is to integrate relevant state and non-state actors in the region and to act as decision making and regulatory body. The president of the Regional Pact is often the prefect of one of the counties, as the involvement of the delegate of the central government facilitates participation of the deconcentrated services in the partnership. A further link to the county level is given through the participation of the co-ordinators of the below explained County Partnerships. To date there are no structures in place to ensure a good communication between national and sub-national level organisations.
In the region North-East the Regional Pact has one president (the prefect of Iasi) and five vice presidents to ensure the representation at decision making level of six organisations: the County Councils of Neamt and Botosani, CEAs of Suceava, Vaslui and Bacau. In the region Center the president of the Regional Pact is the president of the county council and the vicepresidents are the six directors of CEAs. This was recently re-elected with the re-mobilisation of the partnerships by STPs which has begun to work in the end of 2009.

Structures at the county level At the county level so-called County Partnerships have been established. At present there are 33 County Partnerships in Romania; not all counties have established such a structure. County Partnerships play an important role in drafting an employment and skills development strategy for the county, which, in turn, contributes to regional level activities. Furthermore the County Partnerships play an operative role in the implementation of the County Plan, and a guidance/mentoring role towards actors at the municipal, town and village level to enhance local employment generation action. The County Plan is based on the PRAO focusing on the county needs. County Plans are still not existing in all counties but under development. Till now there was a County Plan elaborated by the county council focusing on the infrastructures approach, the main competences of this institution. The County Partnership is an important linkage for multidimensional and multisectoral approaches as its aim is to translate the strategies from other levels into strategic policy documents at county lev el on the basis of a thorough analysis of the challenges and opportunities in the county.
In the North East region in all of the six counties County Partnerships have been established. The coordinators of the County Partnerships are the directors of the county agencies of the Public Employment Service employment agencies who are also members of the regional pact ensuring the vertical communication among the two structures In the Center region 3 county partnerships have been established in the 6 counties of the region.

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Structures at the municipal, town and village level At the municipal and town level partnership activities are mostly project based and not organised around longer term structures. This might be insufficient given the strong local dimension of employment and skills development challenges and the very different contexts in cities, small towns and villages. Working in partnership at the very local level has been introduced by the Romanian Social Development Fund (a programme financed by the World Bank that terminated with Romanias accession to the EU), with the aim to finance projects in the poor rural communities in the next fields: rural infrastructure, social services, small businesses through enhanced collaboration between local authorities and civil society.
In the region North-East the County Partnerships in Vaslui, Bacau and Botosani have started with a system to monitor development challenges in four selected pilot municipalities including a SWOT analysis, interviews and household surveys. In Botosani the two municipalities chosen are Stefanesti and Raffaela, in Vaslui county Negresti and in Bacau county Buhusi. The members of the County Partnership visited the localities, met with the members of the local council to identify key challenges and development opportunities for future ESF project work. Capacity building is important. In September 2009 four Regional Pacts, West, South Muntenia, BucharestIlfov and South East, participated in a study visit to Valles Occidental in Spain. The Consorcio of Valles, the Spanish counterpart of the Romanian Regional Pacts, includes three partnerships of which two are in the two large cities of the Valles Occidental and one brings together all municipalities in the Comarca region. Another international exchange was organised in November 2009 with local partnerships structures in Portugal active in social inclusion. Contacts with these partnership structures allowed for an exchange of experience and were perceived as useful by the Romanian partnerships participating.

Permanent Technical Secretariat With a time lag of two years from the establishment of the partnership structures at regional and county level for each Regional Pact a STP has been established in 2009 to facilitate the work of the partnerships, to support communication processes within partnership structures and to give technical support in preparing project proposals for European Structural Fund applications.21 However, capacity building has been a key objective from the very beginning. This includes training sessions with international experts to stimulate a dynamic process and thematic discussions around issues such as working in partnership, fund raising, financial management, project management, writing quality proposals, and others. International mentoring and coaching is also part of this. A network has been established to bring together all eight STPs in a peer learning process in which one of the STPs will be chairing on a rotational basis workshops and conferences.
In the region North-East the STP was established in January 2009 at the Pietr Andrei University with nine staff; part of which are university employees. The staff includes one director, one project manager, three facilitation experts specialised in employment, social inclusion and communication, one financial manager, one legal advisor, one accountant and one auditor. The last four work part time. The region Center started later with the establishment of the STP; In the moment the team is already complete and the PRAO is done. However the dynamisation process is still in the beginning.

21

It took almost two years till the clarifications and negotiations with the European Commission lead to the need of the STP applying for a project under Key priority axis 3.3 in the POSDRU. This was the main reason why the STP began to work in January 2009.

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Figure 6. Partnership structures at NUTS 2, 3 and 4+levels

A - NUTS 2 Region Strategic role

Regional Employment Pact

Technical Permanent Secretariat B NUTS 3 County Interface strategy implementation

County Based Partnerships

C NUTS 4 + Municipalities and cities Projects

Multiplication level

Local Actors Project promoters

Source : Author.

Regional Plans for Employment and Social Inclusion Elaborating a Regional Plan for Employment and Social Inclusion (PRAO) is the main responsibility of each Regional Pact. The first edition of the PRAO was prepared in 2006 during the process of Romanias accession to the EU for the period 2006-2008. The Plan is based on the Operational Program for the Human Resources Development (POSDRU) and the National Development Plan. Since the Regional Pact was still under formation, the 2006-2008 PRAO was drafted by the Regional Consortia in collaboration with the PHARE technical assistance team and discussed and endorsed by the Pacts. A wide range of actors at regional and county levels have been involved in the process and the fact that the key organisations, even those in charge of skills and employment development, are part of the Regional Consortium and of the Regional Pact turned the process into a participative exercise with broad outreach. The PRAO is considered a key regional policy planning instrument which has as main objective the advancement of active labour market policies. Its main goals are to: Match regional needs and particularities with national priorities. Innovate employment policy by combining and concentrating resources and by introducing and testing new approaches. 62

Contribute to the achievement of national targets within the European Union Lisbon Strategy for jobs and growth.

The second PRAO, for the period 2009-2011/1322 being finalised in the moment was already a common work between STPs and the Regional Pacts, representing an important step further in the development of a common vision for the regional partners. An important step towards making the PRAO a strong programming and planning instrument is the current integration into the Chapter on Employment in the new National Reform Plan of Romania. All PRAOs now also include a chapter foreseeing provisions for the monitoring and evaluation for PRAOs implementation. Still at the level of the Regional Pacts it is important to highlight that the new PRAO is intended to be a strategic instrument for the region which will be integrated in the national strategic documents being negotiated with the European Commission. The method used for the drafting of the PRAO 2009-2011/13includes: Research into local development indicators and establishing baselines; Evaluate PRAO 2006-2008 and prioritise areas of intervention also in accordance with European Guidelines23; Undertake forecasting exercises; Prioritisation of according to the previous analysis result and following the European Guidelines11; and, Consultation and approval process involving a broad variety of actors.

PRAO of region North-East is ready to be presented to the Managing Authority of POSDRU for final approval. It was already presented and discussed within the Pact and the other partnerships. The Center region has just finished PRAO in spite of the late settlement of the STP, which just began the activities.

The role of local partnerships in employment development Strengths and Challenges A number of promising initiatives can be observed in the work of the partnership structures at regional and county level. There is a well recognisable desire to collaborate in all the member organisations of the Regional Pacts and the County Partnerships, despite the fact that two years after their formation joint ESF financed projects are yet to be started.24 It should be taken into account that all the individual members of the partnerships are participating in the Regional Pact and county Partnership meetings in addition to their daily work.
In the regions of Centre and North-East several local development projects, integrating a variety of issues from
22

In May 2010 7 PRAOs were approved BY WHOM?, and will be in a second stage approved by the Management Authority of POSDRU. The PRAO for the Centre Region is delayed as the process started later (see chapter X). The updated PRAOs are: Bucharest-Ilfov 2009-2011; West 20092012; North-West 2009-2013; North East 2009-2011; South-East 2009-2011; South-West 2009-2011; South Muntenia 2009-2011. EC (2008) Integrated Guidelines for 2008-2010.

23

24

In 2008 more than 270 projects were submitted to the ESF Managing Authority for approval.

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infrastructure development to skills development and social inclusion have been prepared. The human dimension, that is the people involved and their interests and motivations, is a key framework condition for partnerships. The Regional Pact of South Muntenia can be mentioned here as an example of continuity and increased importance in local governance. The region is one of the larger regions in Romania and its particularity is its spread around the region of Bucharest-Ilfov, which because of being the capital region has a great pulling effect. The University of Targoviste has played since the establishment of the Regional Pact a key role in the partnership building process and acts today as STP. The fluctuation of staff in the member organisations has been very low, which allowed for a great continuity of the Regional Pact as the stayers outnumbered the new comers. The president, in his office from the Pacts establishment is a top manager of a metallurgic company. The STP is very much engaged in capacity building activities and in 2009 18 people of the Regional Pact and STP attended the different national and international study visits. It is interesting to see how the potential of this region is growing and how ideas for integrated development projects begin to emerge at regional, county and local levels. As mentioned above the legal status of the partnerships structures is an issue of further development. In the North West region the Regional Pact acquired the status of an association. It will be interesting to follow the results of this legalisation.

In the following the key strengths and weaknesses of the assessment of the current role of the partnership structures in local employment and economic development are briefly presented.
Strengths At national level there is a strong awareness about the need for greater decentralisation of decision making, empowerment of sub-national actors, and capacity building in order to raise capabilities in making best use of available resources. Responding to the needs raised by the severe crisis in Romania the POSDRU has created an anti crisis package of measures using the state aid and de minimis rules for involving companies in the training and employment schemes. The partnership structures combine a top-down with a bottom-up approach which enhances local acceptance and ownership as well as legitimacy at a political/decision-making level. The Romanian partnership model comprises a multilevel dimension combining a horizontal networking process with a vertical communication process through the County Partnerships and the local level structures. The establishment STPs will be an important tool to build capacities of local partnership structures and to enhance their contribution to local (project based) partnerships. A community of practices is being established to allow for a closer collaboration amongst all eight STPs. There is a commitment and ownership in the partnership structures. The Regional Development Plan for Employment and Social Inclusion (PRAO) is meant to represent sub-national needs bringing together local, county and regional perspectives in the National Development Plan. The Regional Pacts and the County Partnerships have been applying also to other sources of funding beyond the ESF. This is a positive sign and can be seen as a first step towards more integration of different policy areas at sub-national level allowing for multidimensional responses to local development challenges Challenges The County Development Plan does not link sufficiently with PRAO and PRAI. The participation of social partners in local employment development measures is still low, despite the existence of a consultative committee in CEAs. This also has an impact on social partners involvement in partnership structures. Capabilities to draft successful project proposals for national and European sources of funding (National Employment Agency, national calls, ESF and EFRE) are underdeveloped. The role of CEAs in the partnership structures need to be developed. CEAs should recognise the potential of the partnerships as multisectoral and multilevel tools of governance and not only see members as bilateral collaboration partners. The lack of consolidated baseline information is a major problem for sound local employment strategies and actions. Consequently PRAOs are not sufficiently based on country and local needs and priorities. Continuity of STPs is not given as they are projects with a three-year duration period and performance criteria are not reflecting broader issues of partnership building. Trust and engagement are difficult to sustain in a system that suffers from high levels of politicisation and fluctuation. Monitoring and evaluation are still underdeveloped and more involvement of County Partnerships and local partnership structures is needed, also in terms of PRAO updating.

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Key issues Facilitate multi-level communication, also across policy areas Different entities are involved in local employment development at the national level. More communication is needed with the organisations of other policy areas organisations, in particular between the de-concentrated services at county level. Moreover the centralisation of the system (stronger relationships between the de-concentrated services and the central structures than between the different local services) renders difficult policy co-ordination at regional and local levels. The national programmes deriving from the different policy areas follow a silo logic and lack the degree of complementarity needed for greater policy and strategy integration at regional, county and local levels. Legal status The Regional Pacts and the County Partnerships exist on the basis of a Pact Charta and a cooperation agreement signed by all members. Both the Regional Pacts and the County Partnerships lack legal status and thus are not eligible for the submission of projects for Structural Funds financing. However the organisations participating in the partnership structures can apply, also forming a partnership for this purpose. Since one of the eligibility and selection criterion is the financial capacity of the applicant/promoter the fact that several organisations can apply and not only one (the Pact or each one of the County Partnerships) is a positive factor in terms of capacity of funds absorption. Another issue regarding the legal status is the difficulty of public organisations that are centrally managed (such as CEAs) to be partners in an association.25 Projects are normally developed by some of the members together according to their competences profile and the objectives and content of the project. Another bottleneck seems to be the caused by fact that the Regional Pacts and the County Partnerships have not been delegated any responsibility in local employment or economic development matters. This implies that they have no budget to manage to as Regional Pact and County Partnership and because of the absence of flexible use of state transfers also the single organisations cannot allocate money for the creation of a partnership budget. Local labour market data collection and analysis The partnerships, comprising all relevant actors that produce local labour market data, would have the capacity to lead the process of collection and analysis of local labour market data. This is the case mainly for regional or local information. Data that can be collected at central or regional level broken down per regions and counties include: ethnic composition; mortality and birth rates; tourist accommodation capacity; main indicators about the working force (active population, employment and unemployed rates, gender distribution, etc.), and number of employees by activity sectors. From the NEA and CEAs data on number of persons in training measures, number of vacancies, type of vacancies are available. Socio-economic at the level of local economies and firm-level data are however largely missing. The main problem is related to the centralisation of the system which hinders a better cross information at the sub-national level. As it was already mentioned the high segmentation of the different policy areas does not provide a good matching and level of co-ordination between the statistical structures of the different thematic areas especially when it is necessary to compare and
25

An example is the North West region which has succeeded to build an association but in which the Pact was reduced from more then 70 partners to around 20. Some of the excluded by these status difficulties are exactly the Employment centres. The Pact tries now to find a solution for this problem.

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integrate data at regional, county and local levels. Another important problem, reported by STP regarding the elaboration of PRAO, is the lack of compatible statistical information at county and subcounty levels. Design, delivery and monitoring of local active labour market measures There is still room for improvement in what regards active labour market measures. These are designed and enacted at the national level by the national employment agency level for the entire national territory. There are no specific local territorial measures. CEAs and the local offices (workpoints) are responsible for the delivery of the existing measures within the limits of national budget allocation. In particular during the current crisis the shortening of the budget is a main constraint on achieving earlier set targets for training and job placement measures. Special anti-crisis measures have been put in place based on state aid and de minimis rules applicable to companies. It is important that information on these measures is made available at the county level. A lack of it can present two big disadvantages: firstly, the non-usability of the measures/resources so necessary according to the statements of the actors involved in the interviews, and secondly a low absorption rate with the rule n+3, which can lead to a partial re-payment of the ESF budget to the European Commission. In spite of a growing consultancy and training providers take up of these measures need time as capacities need to be developed. To increase co-ordination of policies and building of synergies in delivery it is important to alleviate the atomisation of actions that lack strategic intended outcomes. This could be achieved by a task force that involves all the main three or more organisations who are responsible for employment policies such as: the Direction for Employment Policy as a policy maker, NAE and the OP Human Resources as responsible for the implementation of the policy. Partnerships must involve more civil society actors and more local authorities at least in the working groups, especially the main cities, because they can have a pushing effect in the process. STPs must clearly define a strategy of re-activating the County Partnerships and to instil dynamism into actors at the local in order to involve them in local employment activities. Facilitating the drafting of integrated local plans is the task of STPs. They need to ensure entire-territory coverage in their work, involving all counties, municipalities, towns and communes through extensive field work and personal contacts. The Regional Pacts shall be given a clear role in the monitoring and evaluation of PRAOs and PRAIs. This also as they are supposed to have a common vision what regards the future development of a region. This approach must be based on a county based process to be able to respect the specificities of each territory and respective strategies, yet keeping in mind wider strategic goals of the region. It would be advisable to establish a kind of observatory as part of each Regional Pact that will be tasked with gathering an analysing local development information, to establish baselines and to monitor and evaluate the achievements of the regional strategies (PRAO, PRAI). Political influence in partnership structures One of the main constraints felt by the members of the partnerships and by STP experts is the political influence on the institutional system, which has an impact on the partnership structures.26 Over the last years the political situation in Romania has not been very stable and the changes in government have had chain effects on the top management in almost all institutions at regional and
26

The members of the partnership structures are mainly representatives of organisations belonging to the public administration.

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county levels. Since especially the Regional Pacts have an essentially institutionalised character these frequent political changes have an important impact on the stability and continuity of the partnership structures. For the County Partnerships the main problem lays in the management since most are led by the directors of CEAs, who are changing if government changes. This fluctuation does not allow for continuity in the development of trustful relationships between the partnerships members, it impedes the development of a credible leadership and it turns difficult to advance with institutional and individual capacity building efforts. Sustainability of the partnership structures The time lag of two years between the establishment of the partnership structures and STPs created a situation in which tasks and responsibilities are not clear. STPs will have to find their place in the established regional, county and local partnership structures. This might be difficult given the project character of STPs with a duration of three years. This sets a limited horizon for respective activities and impedes a real mid-term planning with the partnerships at the different levels involved as the main priority is to perform according to requirements set, which are the number of projects presented and approved for ESF funding. Especially in partnership processes that require time and increasing commitment is very critical to have a structure that will finish when they begin to be finally prepared to accomplish their job. The SPTs are closer to the Regional Pact than to the County Partnerships and the local partnership initiatives. The project character is adding to this as STPs may consider their own interests (i.e., getting a renewal based on the mere number of project propsals presented) over the wider objective of partnership building, which is not specifically stated as a performance criterion. To avoid this, a closer and more attached link between STP and the Regional Pact and the County Partnerships (as link with the local project-based structures) shall be found; the STP should be considered a project of the partnership structures with a direct reporting linkage to the Regional Pacts. A possibility to prove this is the update of PRAOs. The members of the Regional Pact chose the STP; this adds to their legitimacy in facilitating the work of partnership structures. Yet, more needs to be done to ensure high acceptance by and engagement of the Pact members, mainly because there are no results in terms of approved projects. Hence visible results showing the advantage of working in partnership are yet absent. This is an issue that STPs need clearly to work out and very soon go for county and local strategies. Without evidence of good results of the work in partnership and, in turn the useful facilitation and support work by STP the partnerships may not go on. STPs will need to put more efforts on the development of facilitation skills and to build on former experience in community development and partnership work. This means the need of a good and mid-term plan for the capacity building of STPs, which may be limited by the project character of their existence. Capitalisation of results will depend upon continuity. Involvement and commitment are key success factors for local partnerships. In order to turn them into governance tools a certain level of national level support is needed in particular in terms of capacity building and ensuring continuity. International exchange activities proved to be successful in this so far.27 It is necessary to allocate more resources because of the length of the process and some discontinuity with regard to the people involved. It is necessary to create mechanisms to ensure the continuity of STPs and to allow at least for a mid-term planning. It is the only way of capitalising the huge investment made in capacity building so far. Another important aspect is to create a more direct linkage between STPs and the Regional Pacts
27

A statement of a member of a Regional Pact member participating in a study visit to Portugal was ... I confess that until I was in Portugal and I saw how it works I also was not very convinced about the importance of working with the partnerships... .

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to ensure that the Regional Pacts identify STP as defenders of their interests (advocacy role) and not as safe-guarding own interests. It this thus important to create a funding line for the STPs giving them a permanent character with the aim to facilitate the activities of partnership structures at regional, county and local levels. It could be arranged in a format that would allocate the budget for the STPs to the Regional Pacts, who would act as reference and performance monitoring instance, agreeing, for example, annual action plans for STPs. Also important will be to establish a co-ordination unit (not hierarchical) for all STPs at central level to ensure exchange activities and learning from good practice. This would also give the partnership structures a greater role in horizontal with central decision power. Staff fluctuations can be a main barrier to partnership building. Ways to overcome continuous changes of people should be found. One strategy could be to have more than one representative per institution (which could, however, enlarge the partnership structures), whereas another possibility could be to widen the partnerships by encouraging more membership from non-partisan institutions. Capacity building for the partnership structures When looking at the number of approved compared to the number of submitted projects, the impression is that there are low capacities to write successful projects for ESF financing. Yet, a deeper look brings to light that a main reason of non approval is the presence of information that can enable the evaluator to understand the identity of the applicant as for security reasons the evaluation has to remain anonym. This means that there is not an exact measure of how many proposals really would fail due to lack of quality regarding the idea or the content formulation, summing up because they presented a bad proposal for a project since they are immediately eliminated if the promoter can be identified. It will be a task for STP to get to know the weaknesses of the applicants and to feed back this information to them and/or to prepare the necessary trainings. The Technical Assistance has already provided training to STP to empower them to do these trainings to the potential promoters coming from the partnerships. Training sessions on project proposal writing and presentation were organised for more than 4000 people including representatives of Regional Pacts and County Partnerships. Advertisement campaigns and personal recruitment ensured this high participation rate. A follow-up training was organised for successful applicants on project and financial management matters. Despite high participation rates and training quality, there is a rather meagre success of the efforts, which needs to be interpreted as a result of the still very high rates of staff fluctuation in the public administration. All the same it is also important to organise more exchange activities between the Regional Pacts and the County Partnerships in Romania to create more common spaces for knowledge and trust building and also to raise the potentials of sharing small successes which help to reinforce the principle of partnership working. In such a context it is also easier to overcome political rival ties between organisations and to increase visibility and co-responsibility. To establish good communication mechanisms either horizontally within the partnerships STPs can now play a crucial role in this task and they are doing it through the creation of the website. A re-activation of previous existing working groups could improve trustful relationships and communication. The more the partnerships at regional, county and local level work hand in hand, the more vertical communication with those in charge of policies will be meaningful, as there is an interaction through the levels of representation. It would be important to raise the importance of the partnerships in the process of determining the relevance of the projects for the development of the county/region. For this reason it would be 68

interesting to create a system in which the partnerships would generate a written opinion about relevance to be integrated in the evaluation process as one additional piece. One possibility would be to submit the final list of projects approved by the Intermediary Bodies to the Regional Pacts and these would list them according to a ranking of relevance. This would also increase the legitimacy of the partnerships at regional and local level.

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Learning from good practice: Local partnerships unlocking local potential for the economy and employment in Berlin In the following section a learning model from Germany presents useful insights on the development of a local partnership in Berlin. The Local Pacts for Economy and Employment in Berlin are the main pillar of a locally based funding strategy. As a follow up of a pilot project in Berlin-Neuklln, the local approach to job market policy has been developed with the formation of the Local Pacts (District Alliances) for the Economy and Employment and includes the whole of Berlin. The aim of the Local Pacts for the Economy and Employment is to advanced cooperation directly in the districts in order to unlock the local potential for economic growth and more and better employment. With assistance from different local stakeholders, local action plans and fields of activity are developed and regularly updated. The action plans serve as planning and operational frameworks in order to: 1. 2. 3. 4. Accelerate local economic growth. Generate employment places. Create training places. Strengthen the social infrastructure.

Pilot project Territorial Employment Pact Berlin Neuklln (1998 - to date) Who can ensure more jobs and positive economic development at the local level? And with whom and how? How can a location be safeguarded, developed and the image of a Berlin district with over 20% unemployment be improved? These were the questions on the minds of local actors in the Berlin district of Neuklln when they leaned of the opportunity of taking part in the European Territorial Employment Pact strategy launched in 1997. Due to the problems of the district and simultaneously the commitment of local actors, the European Unions Territorial Employment Pact pilot initiative fell on fertile ground. The Senate department (i.e., Berlin government) responsible for employment, in particular the responsible state secretary and the body at the Land level responsible for the European Social Fund (ESF), were very interested in implementing the local components in a Berlin pilot project as cross-sectional themes of the European Employment Strategy. Therefore with the support of the gsub, Gesellschaft fr soziale Unternehmensberatung mbH, the Wirtschaft und Arbeit in Neuklln e.V. association applied for recognition as one of the 89 new European and German territorial employment pacts. This had been preceded by a study from the gsub on the urban district of Neuklln (314 000 inhabitants) that analysed the local economic and labour market structure in a regional and European context. The study, financed by the federal Land of Berlin and the European Commission, provided analysis material on the district that was embedded in the overall Berlin context and enriched through experience gained from study trips to Newcastle (United Kingdom) and Belfast (Northern Ireland), and which provided indicators for introducing new elements in the local employment policy.

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Organisational structure The Neuklln Employment Pact has been organised as an association, called the Wirtschaft und Arbeit in Neuklln e.V. The association consists of an executive committee, the management, an advisory board and the members. The local mayor of Neuklln and a member of the Berlin Senate were the first joint chairpersons until 2001. Later the major and the vice-major overtook. (Recently the organisational structure of this more then ten years old pact changed again: the responsibility and leading role has been shifted from the association directly to the Local Authorities, Department of Economic Development). A leading member of the local housing association was elected as deputy chairperson and the owner of an SME was elected treasurer. The Executive Committee also included two advisory members a German and a Turkish businessman (in 2004 they have been replaced by the manager of a big shopping centre and the manager of the biggest Hotel in Berlin, based in Neuklln). In addition to the Executive Committee, the Advisory Board included the director of the local employment office, Berlins ESF fund administrator and the Investitionsbank Berlin a public bank of the Berlin Senate. As permanent members, gsub (as pact coordinator) and the districts economic advisor took part as consultants in all Executive Committee and Advisory Board meetings. The Associations management office conducted the day-to-day business and prepared the respective meetings. Thus the Territorial Employment Pact was structured as follows: Main partner, control and decision-making body: Wirtschaft und Arbeit in Neuklln e.V. with its various committees and boards according to the bylaw of the association. Pact coordination, advisors on content and financing, monitoring of the pact, reporting: gsub, Gesellschaft fr soziale Unternehmensberatung mbH, as intermediary. Co-ordination of individual measures within an action: main actors in the action.

Local action plan One of the European Commissions prerequisites for recognition as a Territorial Employment Pact (endowed with a comparatively moderate sum of EUR 200 000 as start-up financing for two years) was the submission of a local action plan that was in compliance with both the local requirements and the European Employment Strategy. This prerequisite corresponded almost precisely to the more clearly emerging ambitions of the actors joining forces in the Wirtschaft und Arbeit in Neuklln e.V. association. The action plan was developed on the basis of three pillars: Local needs, in particular in regard to strengthening the districts economic structure, safeguarding employment and developing new jobs through workshops and interviews with the most important local actors. The European Employment Strategy with its four pillars: employability, entrepreneurship, adaptability and equal opportunities. The previous study, which provided statistical data material and, in addition, approaches from other European regions.

Based on these three pillars, six actions were initially drawn up which were later continuously developed, partly replaced by others or supplemented by new actions.

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Evaluation In 2002 the European Commission commissioned an expert to evaluate the Pact for the entire period from 1998 until 2001. In this respect the period of direct EU funding, as far as it related to the Pact co-ordination, is also suitable for depicting several quantitative outcomes28. From pilot project to mainstreaming on the level of the Land Berlin The most important outcome of the first phase (1998-2001) was perhaps the pilot projects implementation at Land level in the form of the Berlin Senates District Employment Alliances strategy (Bezirkliche Beschftigungsbndnisse). In the Senate publication Berlin strategy for using the European Social Funds (ESF) for the planning period 2000-2006, published in 1999, one of the future policy areas is identified as Local Development Projects-Territorial Employment Pacts. Thus the district was therefore officially defined as local level in terms of the European Employment Strategy. The district territorial employment pacts (TEPs) were intended to combine the programmatic goals of the European Union with Berlins labour market policy. The aim of the TEPs was through coherent and harmonised coordination of the individual actors on the basis of communal development programmes, to combat unemployment, create training places and strengthen the economic structures at the district level (Berlin Senate 1999). At least for the first time in Berlins more recent history it had been possible to transfer responsibility but above all scope for shaping employment policy to the decentralised level of the districts. In the following period TEPs have been created in all 12 Berlin districts. To date these have been known as Local Pacts for Economy and Employment ( Bndnisse fr Wirtschaft und Arbeit) since the SPD-PDS coalition came to power and since the fourth updating of the labour market policy framework in 2002. Nowadays, in every district there are steering committees that create, authorise and update local action plans as well as offices that are responsible for administrative, preparatory and executive work. The respective committees are complementary in terms of their composition. That means that in addition to the public administration, mostly represented by the Economic, Social and Youth Departments, members include equal opportunities and immigrant representatives, business groups, local Confederation of Trade Union (DGB) groups, unemployment initiatives, the respectively responsible employment office, representatives from job creation agencies, citizens groups and housing associations, etc. Intermediaries, such as gsub, play an important role in counselling and pushing forward the pacts. In 2008, gsub mbH and two other companies (ziz GmbH, SPI Consult GmbH), set up a consortium called comovis GbR (www.comovis.de) which is in charge of a major part of the Berlin active employment policy. Regarding the TEPs, comovis, as service provider for the district pacts (eventually similar to STPs in Romania), is responsible for the following tasks:
28

Persuading the actors to participate in the district alliances and TEPs. Analysing the local context in terms of economic, employment and social aspects (if necessary supplemented in terms of education, environment and culture). Involvement in developing the local partnership.
Thematic Evaluation of the Territorial Employment Pacts Final Report Annex 3: National Report on the overall performance of the TEP Programme: Germany, prepared by Dr. Thomas Stumm, EureConsult S.A. Luxembourg Ecotec Research and Consulting Ltd.

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Training the actors and/or organising training measures. Providing support with drawing up the action plan and with determining the fields of action. Finance architecture providing support with the acquisition and bundling of funding.

Financing Between 1999 and 2001 the pact co-ordination and the Executive Boards management office were each financed with one employee (pilot project) by the European Commission (as part of the TEP-initiative of the Commission). In addition the association also had its own source of funding through charging membership fees, graded according to whether members were companies or private persons. These funds were primarily used for public relations work and events. Depending on the form of financing, the individual actions and the actors within the individual actions were financed with ESF, government, Land or private funding or from a mixture of these funding sources. All other tasks described above were performed by non-paid volunteers or as part of the official work of the respective office holders. Between 1999 and 2001 no separate funding was available to the district alliances for implementing the local action plans unless they successfully applied to European Union employment initiatives such as ADAPT, URBAN or later EQUAL. However, this has changed since 2003. Today, the following funding is exclusively available to Berlins Local Pacts for the Economy and Employment: Economic development measures. Furnished with ERDF funding (European Regional Development fund), the European Consulting Group (ECG), the body for technical help in Berlin, administers a fund that awards, in competitive tendering procedures, measures submitted as part of the local district pacts. This presupposes that the applicant co-finances the project to 50% of the overall financing (because since 2007 Berlin is, in terms of the EU Structural Funds, a Regional Competitiveness and Employment Region). As the name suggests, the measures refer to local economic activities that promote the local economy and infrastructure and support small and medium sized enterprises as well as locally based retailers. The amount available for each district is about EUR 1 million of ERDF means in the ongoing period 2007-2013. Local Social Capital (LSC). This 100% ESF-funded programme is implemented in each of the 12 districts. Based on local action plans, micro-projects can be funded in these areas to a maximum of EUR 10 000, and in exceptional cases even to EUR 20 000. The decision as to which micro-projects are selected is ultimately made by the local alliances in agreement with the coordinating office organised by the Senate. The district pacts receive annually roughly EUR 100 000 for implementing micro-projects according to their action plans. Partnership Development Employment (PDE). PDE is new programme (launched in 2008) that opens up additional possibilities in order to unlock employment potential and open new fields of employment, as well as trying out pilot projects in order to improve the work-related and social integration of disadvantaged groups of people. PDE is financed by ESF means (up to 50%) and co-financed by National, Land or private means. The pacts can apply for 1 million ESF-means per district during the ongoing period 2007-2013.

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Why is the initiative a good practice? It was possible to continue and even considerably expand both the pilot pact in Berlin-Neuklln as well as the other 11 pacts in the city. The Neuklln Employment Pact created 2 371 jobs by 2001, which included 1 283 in the main labour market as well as 318 training placements and 770 jobs in the publicly funded employment sector. These figures were validated by the local Public Employment Service and the European Commission. However, during the first period there was hardly any drop in the number of unemployed. The development of new jobs could evidently not (yet) keep pace with the collapse of traditional industries. Due to the numerous factors impacting on the entire labour market in Berlin and Brandenburg, it was difficult to measure the quantitative effects achieved by the Pact. Such a conclusion may be unsatisfactory from the socio-scientific perspective and can also not be discussed here in any great detail. Nevertheless, for most of the actors it was important to set quantitative objectives and to also measure themselves against these at least in those spheres of action in which it made sense. This is because the objectives and quantitative target/actual comparisons provide orientation and a measure of success and enable the legitimacy of the project and use of funding to be explained to a sceptical media and parliament who are mostly interested in figures. With the start-up financing of EUR 200 000 (1998 to 2001) from the European Commission as part of the Territorial Employment Pact strategy (European Commission 1999), it was possible for a total of EUR 26.6 million to be either directed to or generated within the district for the purpose of the Pacts actions. In the pilot project 50% was made up of national funding in particular from the Public Employment Service approximately 30% came from federal Land funding (like county council), 8% was EU funding (European Social Funds, European Funds for Regional Development) and 12% private funding that was primarily contributed by companies and private sponsors. In qualitative terms, it was the development as well as the quality and scope of the partnership that was of decisive importance. In particular it was concerned with involving local enterprises in the activities, which partly succeeded through the association (e.g., companies as members of the Advisory Board and as association members) and the numerous activities (e.g., Business Fair, Action 4 Challenge`- an action which addressed downsizing companies). As every action was moderated by a main partner and in turn numerous other actors were involved, it was possible to gradually sensitise, interest and mobilise other institutions, groups and patrons to become actively involved and thus ultimately generate social capital. Furthermore, as illustrated by the headlines of the local and regional press, it succeeded in improving the image of the district while simultaneously focussing the attention of political decision-makers on the problems and opportunities of the district. Generally, the Berlin TEP-strategy gave local actors for the first time the opportunity to design and implement activities as part of active employment policy programmes. Nevertheless there was, and still is, a certain conflict between the matters that are regulated centrally at the Land level and those that are better dealt with at the local level. For instance, if a district alliance develops an activity with regions from Eastern Europe or attempts to establish independent contact with the Commission in Brussels, this could conflict with the Land maxim that the Land should speak with one voice and not with a choir of twelve different district alliances. National organisations, such as associations and professional bodies, find it difficult to split their resources through being involved in twelve different alliances and are therefore hardly represented in them at all. Such difficulties cannot simply be ignored and require instead a permanent regulatory, exchange and negotiation process that can be conducted directly between the various administrative levels or to some extent with the help of intermediate facilitators.

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From the experiences in Berlin, specifically in Neuklln a list of key steps in successful local partnership working can be established (Figure 7).29
Figure 7. Key steps in successful local partnership working
Developing a complementary and horizontal partnership the partnership should not be dominated by any one kind of actor (e.g. public administration or large company). Rather it is essential that there is a heterogeneous but nevertheless manageable partnership that comprises the most important local actors. The partners should treat one another on equal terms in terms of the economy, employment, social issues, environment, education and culture before implementing the action plan as the main job creators not just the organisations that represent them in terms of qualitative aspects, based on the local conditions and structures and focussed on clear, quantitative objectives from the pre-start-up and start-up phases to the establishment and growth phases regional identity, horizontal networks and economic prosperity form a mutually independent triangle that radiates to other regions taking into account the needs of the areas inhabitants, involving the inhabitants and allowing them to take part in all stages of the pact development and the individual projects in particular to act as a moderator for the alliance and to acquire and bundle funding whereby it was generally concurred that these were more likely to be achieved at local level than at regional, Land or federal level

Analysing the local conditions

Activating and involving local companies Drawing up an action plan

Creating a support culture and a positive climate for SMEs Improving the regional identity, corporate identity and marketing strategies of the region or local area

Linking economic and social issues

Involving a professional intermediary Inter-departmental and cross-party cooperation between actors

Framework conditions that make the initiative work Vertical integration and issues of multi-level-governance. The European Union can undoubtedly take credit for the greater importance attached to the local level as a result of highlighting it in the employment policy guidelines and firmly establishing it as a cross-sectional theme in the European Employment Strategy. However, in contrast to, for example, Austria, where a Territorial Employment Pact was implemented as a federal programme, the local approach in Germany seems to have met with less response at the federal government level, even if numerous federal programmes have been introduced recently to strengthen the regions (i.e., Prospective 50plus above). It is therefore by no means farfetched to suggest that having complementary, coordinated interaction between the four levels European, national, regional and local is a decisive factor in success of the local level. In particular, the Berlin pacts have been successful because they are based on the labour market policy of the Land Berlin and strongly supported by the European Employment Strategy and the respective Structural Funds.

29

See also: www.avalon-gsub.de. AVALON Added Value of Local Networking was a trans-national project carried out by gsub and several European partners.

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Horizontal integration: complementary actors co-operating on the same eye-level. The cooperation on the level of the local partnership has turned out as a crucial success factor: only when different partners, not only the public bodies, work really together, does the strategy have an impact on the local economic and employment development. Thus it was necessary to conclude contracts (written agreements) with the rights and duties of each partner. However, there are still conflicting goals in decision making processes: establishing steering committees in the local alliances has meant that a structure has been developed that inevitably clashes with the conventional decision-making structures (for example, local authority committees, local employment offices administrative committees). For instance, if a TEP decides to carry out specific job creation and structural adjustment measures that are tailored to the needs at the local level and which accord with the local action plan, this can conflict with the decisions made by the actually responsible sub-committee of the local employment offices administrative committee, dependant on the National Employment Agency. For example, when adopting the rules of procedure for a steering committee, the director of a local employment office put on record that he would only support the decisions and stipulations of the alliance to the extent that they did not conflict with the rules, circulars and committee decisions of the (Federal) National Employment Agency. Such problems can, however, be solved pragmatically, such as by submitting a list of measures to the responsible committee that have been discussed in advance within the alliance and have been previously agreed upon with the locally responsible employment office. Identifying fields of activity and setting up local action plans. Two instruments are favourable for implementing the local employment strategy: Identifying and defining fields of activity for a certain period and setting up local action plans. Not all problems can be tackled by a local employment strategy: thus it is necessary to identify and to describe the most challenging issues and concentrate on them. The local action plans, which cover the identified fields of activities, describe a general strategy for the locality, designing and developing concrete projects, which respond to local needs, are an important instrument in order to follow a holistic approach and a coherent strategy. Bottom-up approach and round table coordination versus efficiency and effectiveness. Quoted from a local pact manager after eight weeks on the job: I have to attend so many coordination meetings that I dont actually have time for my actual tasks. This quote just goes to show the amount of effort involved in establishing local partnerships, drawing up action plans and, above all, in the permanent coordination and negotiation processes that take place between the actors involved. It is possible for the undoubtedly necessary discussions and coordination processes to take up so much time that they block the implementation of concrete actions. Apart from the fact that the actors represent different interests, they often also speak in the different languages of politics, administration, science, the private sector, EU jargon, the housing industry, social work, etc, which makes it difficult to reach a consensus. Nevertheless there is still an urge to take a proactive approach since, if an alliance wants to be successful, this requires that services are rendered in a foreseeable period, that outcomes are demonstrated and impacts achieved that can be communicated to a critical public and made plausible to the different donor organisations. Monitoring, evaluation and validation versus bureaucracy. Undoubtedly analysis (of the local situation), monitoring (of the programmes and projects of the TEP to enable transparency), evaluation (to assess the outcomes) and accounting procedures are indispensable elements of an local employment development strategy. The EU prescribes obligatory monitoring and evaluation procedures for programmes, projects and measures that are (co-) financed through the European Structural Fund. Besides national regulations of each Member state, in addition there are diverse EU regulations. In the previous and in the current funding period, uniform standards are being set throughout Germany according to the so-called master data list procedure (Stammblattverfahren), 76

which are ultimately intended to enable the measures and programmes to be controlled, compared and assessed in terms of context, input, course and output as well as in terms of result and impact indicators. As the ESF funding is generally allocated to the (federal) national or Land budgets, but also because of national or Land co-financing, the provisions of the respective Land or national budgetary regulations also apply. Every grant recipient must ultimately prove that they are using the funding in line with its intended purpose and must comply with numerous other provisions. Collecting the data necessary for this and conducting the corresponding procedures require a considerable degree of administrative effort that is frequently criticised by the potential applicants and grant recipients as too bureaucratic. This particularly applies to local actors and new, inexperienced applicants and initiatives not yet familiar with the structural fund regulations and other legal requirements but who, for example as part of the Local Social Capital programme, are supposed to be drawn into the ESF. To provide support, it is suggested that so-called intermediary bodies are used that not just take on part of these administrative tasks but also develop and implement IT-assisted procedures (for example online procedures) that make the flood of data more controllable. Of course it should also be continually checked as to which data and procedures are indispensable and which can be dispensed with. The new possibilities of simplification (for instance, EU-Regulation No. 496/ 2009 for the European Social Fund) offering simpler accounting procedures of ESF-means (such as counting indirect costs up to 20%, standard-unit-costs and lump-sums up to EUR 50 000) by the European Commission should be put in place in the National procedures.

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CHAPTER 6 CONCLUSIONS AND POLICY RECOMMENDATIONS

MoLFSP and the Managing Authority for POSDRU have undertaken some very important steps towards decentralisation and more participation in local economic and employment development matters. This work needs to be continued. This report has outlined a number of key issues in its different thematic chapters concerning the degree of policy and strategy integration and the role of the public employment service and the contribution of local partnerships to policy delivery (and design). This concluding chapter presents the key conclusions and overall policy recommendations that resulted from the local case studies, but are of a wider relevance for Romania. Policy and strategy integration for local economic and employment development Sub-national level policy and strategy integration capacity The extent of policy and strategy integration at national level needs to be better reflected at subnational level. Clear linkages are needed, for example, between PRAI and PRAO, and lower tier strategic policy documents should contain references to both. The partnership structures can be important instruments for greater policy and strategy integration. More formal co-operation between the existing partnership structures is needed. The role of the recently established STPs should be reviewed to this end, also with regard to the importance of having in place a one-access point for information on objectives, targets and measures of the different government policies and EU programmes. A one-access point will maintain close and regular relationships with all line ministries and the Intermediary Bodies of all Sectoral Operational Programmes in order to have timely information access, and to perform crosschecks of sub-national strategic policy documents and projects with Romanian legislative and EU directives and regulations. The conditioning of the budgets of deconcentrated agencies and local governments should be reviewed to allow for more autonomy and flexibility in allocating financial resources to joint projects. Enhance local data collection and its utilisation in strategic planning. It is important that the sub-national strategic policy documents have objectives, which fully reflect the socio-economic context, as well as clear and measurable targets; taking into account also the needs at the lowest tier of government. The partnership structures and STPs are a good starting point for local data collection and analysis, and increased work with indicators. A database of all finalised, planned and implemented projects in the region, if possible including also information on rejected projects, should be created. Also useful can be an inventory of all indicators and measuring procedures proposed and used to date. A greater application of SMARTER30 objective planning should be sought.

30

SMARTER standing for S (specific), M (Measurable), A (Attainable), R (Relevant), T (Time bound), E (Evaluate), R (Re-evaluate).

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Establish a sub-national monitoring and evaluation system. The establishment of a sub-national monitoring and evaluation system of the Action Plans and the local strategies should be discussed. Clear guidelines about roles, responsibilities and timelines can facilitate broad participation of policy stakeholders. A monitoring and evaluation system could also be useful to gather information about available financial resources and to plan in advance for future cofinancing requirements. It is important that all tiers of such a monitoring and evaluation system are interlinked. For example the Monitoring Committee of POSDRU is monitoring the implementation of the programme at national level, whereas the regional level provides the interface between the local and the national level (PRAO through STPs and PRAI through the Regional Consortia). Further to this structure foreseen in POSDRU a further involvement of the municipal, town and commune level should be discussed. Incentivise good practice in sub-national policy and strategy integration. The local development impact of increased policy and strategy integration may become visible later than the results of investment in infrastructure development and thus be less attractive for elected political leaders. Yet, infrastructure projects can have an important effect on skills development and job creation if the planning follows integration principles. This understanding needs to be enhanced and its application rewarded. A possible incentive could be a reduction of co-financing requirements for project proposals that demonstrate a particular high degree of policy and strategy integration. Counteract the negative effects of politicisation of the public administration. Any serious efforts to improve policy and strategy integration through partnership structures will be hampered by a high fluctuation rate of senior management in deconcentrated offices. Adding a second person, who represents the senior technical expert level, may contribute to continuity and sustainability of partnership structures. Yet, on the long run, only a rigorous enforcement of the civil servant code will effectively counteract the negative effects of politicisation of the public administration on the sub-national policy and strategy integration capacity. The role of the public employment service in local economic and employment development Strengthen CEAs capacity to make better use of the POSDRU. To act as co-ordinator and leading network partner at the county level, CEAs will need in-house expertise in ESF funding and an up-to-date overview of all employment projects in the county and the wider economic region. The latter could be organised as a database available on the Internet. Close collaboration between CEAs and the permanent technical secretariats of the partnership structures (STPs) is recommended. Possibilities to hire an additional staff member specialised in the POSDRU should be reviewed. Also, Secondment arrangements between the NEA, the Management Authority and the Intermediary Bodies should be taken into consideration. Existing obstacles to outsource counselling to NGOs and private service providers should be removed, as outsourcing can be an effective way to achieve counsellor-unemployed ratios that allow for individual action plans, in particular for difficult target groups. Simplify performance management and introduce gradual flexibility in the budget It is important to understand that the regional and local needs cannot be established by centralised instruments only. There need to be some degree and kind of flexibility to allow for local action and provding CEAs with a 10% free budget could be discussed as an initiative to this end. 79

Enhance relationships with schools, universities and employers. To gain a better understanding of current and future supply and demand and the skills needs, CEAs will have to be more pro-active in approaching schools, local universities and employers, and maintain close relationships. Early orientation measures, short-term work placements for school students, and knowledge and technology transfer schemes for graduate students and local SMEs could be possible ESF-financed projects. Co-operation between the public employment service and private temporary work agencies. In many OECD countries private temporary work agencies play an important role in the placement of the long-term unemployed with an increasing transition rate to long-term and permanent employment. Possibilities for collaboration between CEAs and private temporary work agencies should be reviewed as an option to activate and integrate the long-term unemployed. The role of local partnerships in local economic and employment development Build capacities of STPs. STPs will have an important role in strengthening existing partnership structures at regional and county levels, and in increasing the involvement of the municipal, town and commune level. STPs started working only recently, but already have a full agenda, and thus may risk hurrying up in finalising PRAOs 2009-2010. It is therefore very important to provide appropriate assistance and capacity building, also with regard to a strengthening of the relationships and communication with the partnership structures at regional and county level. A re-activation of the former working group structures could be considered. Create a STP co-ordination unit at the national level. The creation of a co-ordination unit of STPs at the national level would ensure appropriate assistance and capacity building through the application of common guidelines. The current main indicator for performance management ten projects in three years may not be sufficient to measure performance and identify areas for improvement. A national level co-ordination unit could facilitate as well exchange and learning amongst the eight STPs. A joint webportal could be a useful instrument. Involve the Regional Pact in monitoring and evaluating PRAO and PRAI. It is important that the Regional Pact is involved in monitoring and evaluating PRAO and PRAI. Strengthen the County Partnerships and decentralise decision-making. Partnership structures need to be strengthened across all tiers of local government. Solid County Partnerships and STPs will be important for expanding the partnership approach to the municipal, town and commune level. One commentator said: If you do not offer something to the County Partnerships and the local stakeholders they will never be committed. The County Partnerships and, in particular, CEAs should not be considered as mere deliverers of national programmes and Sectoral Operational Programmes. A shift in the decision making towards the local level, offering the County Partnerships more freedom in priority setting, planning, (pre-) selection and monitoring of projects, should be considered for an effective local employment strategy. Possibilities to further formalisation of the County Partnerships, for example in form of an association, should be reviewed as an option to counteract politicisation, and to enhance the County Partnerships role in local governance. Experience 80

from Germany suggests that participation and real commitment at county and local levels will emerge as soon as the County Partnerships have the right and the duty to decide in a given framework. Devolution to the regional level would not have the same effect, as regions are too big (geographic distance, diversity of counties) and little more than statistical units. Strengthen a systematic involvement of stakeholders at the municipal and commune level in employment projects. Partnership is not about the quantity of institutions partnering (the most important stakeholders are already on board), but a question of quality of communication, know-how in local employment development, trust, accountability, leadership, higher-tier support, readiness for responsibility, and sound decision-making and consensus processes. Local empowerment and capacity building can significantly increase the effectiveness of projects. Existing initiatives to involve stakeholders at the municipal and commune level in the design, implementation, monitoring and evaluation of local employment development projects should be enhanced, expanded and systematised. Launch a call for proposals at county level targeting municipalities, communes and towns. Shifting decision-making and responsibilities to the County Partnerships and a greater involvement of municipalities, communes and towns can be organised within the current partnership structures. A call for proposals could be a concrete step towards decentralised decision-making, and would, at the same time, build sub-national policy and strategy integration capacity. The call should be properly prepared by the County Partnerships and STPs with awareness campaigns, gathering local development data and using it to define eligibility and selection criteria. Regional Pacts, Regional Development Agencies and the Intermediary Bodies should support this by ensuring the availability of funds and a transparent process, which is complementary to POSDRU and national requirements. The call for proposals could be organised in four phases. In the first phase, project ideas are submitted to the County Partnerships, who will select the most relevant. Successful applicants will prepare in the second phase full project proposals with the help of STPs, translating ideas into eligible project that comply with the National Employment Programme, POSDRU (or other sources of financing). In the third phase the County Partnerships, in accordance with the respective local government authorities, select the best project proposals. Key selection criteria could be the responsiveness to local labour supply and demand, the targeting of vulnerable groups and the extent of policy and strategy integration. In the final phase, the County Partnerships submit a portfolio of projects to the Managing Authority for final approval. Besides an increased involvement of local stakeholders, such an approach can strengthen the local governance role of partnership structures and turn them into active players on the labour market.

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ANNEX 1 ACTION PLAN

Increasing policy and strategy integration across different tiers of government WHAT Increase sub-national level policy and strategy integration capacity. The extent of policy and strategy integration at national level needs to be better reflected at sub-national level. Clear linkages are needed, for example, between the PRAI and PRAO, and lower tier strategic policy documents should contain references to both. HOW The existing partnership structures can be important instruments for greater policy and strategy integration. More formal co-operation between the existing partnership structures is needed. The role of the recently established STPs should be reviewed to this end, also with regard to the importance of having in place a one-access point for information on objectives, targets and measures of the different government policies and EU programmes. A one-access point will maintain close and regular relationships with all line ministries and the Intermediary Bodies of all Sectoral Operational Programmes in order to have timely information access, and to perform crosschecks of sub-national strategic policy documents and projects with Romanian legislative and EU directives and regulations. The conditioning of the budgets of deconcentrated agencies and local governments should be reviewed to allow for more autonomy and flexibility in allocating financial resources to joint projects. Enhance local data collection and its utilisation in strategic planning. It is important that the subnational strategic policy documents have objectives, which fully reflect the socio-economic context, as well as clear and measurable targets; taking into account also the needs at the lowest tier of government. Establish a sub-national monitoring and evaluation system. A database of all finalised, planned and implemented projects in the region, if possible including also information on rejected projects, should be created. Also useful can be an inventory of all indicators and measuring procedures proposed and used to date. A greater application of SMARTER objective planning should be sought. It is important that all tiers of such a monitoring and evaluation system are interlinked. Clear guidelines about roles, responsibilities and timelines will facilitate broad participation of policy stakeholders. A monitoring and evaluation system could be useful to gather information about available financial resources and to plan in advance for future cofinancing requirements. Management Authority, Intermediary Bodies, Regional Pacts, County Partnerships, STPs STPs, deconcentrated agencies, Regional Pacts, County Partnerships, STPs WHO* Management Authority, Intermediary Bodies, Regional Pacts, County Partnerships, STPs

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Incentivise good practice in sub-national policy and strategy integration.

Increased policy and strategy integration may have a delayed impact on growth than the results of key local government activity such as investment in infrastructure development and is thus less attractive for elected political leaders engage in. A greater emphasis on policy and strategy integration needs to be incentivised. Infrastructure projects can have an important effect on skills development and job creation if the planning follows integration principles. This understanding needs to be enhanced and its application rewarded. A possible incentive could be a reduction of co-financing requirements for project proposals that demonstrate a particular high degree of policy and strategy integration.

National ministries and deconcentrated agencies, local governments

Counteract the negative effects of politicisation of the public administration.

Any serious efforts to improve policy and strategy integration through partnership structures will be hampered by a high fluctuation rate of senior management in deconcentrated agencies. Adding a second person, who represents the senior technical expert level, may contribute to continuity and sustainability of partnership structures. Yet, on the long run, only a rigorous enforcement of the civil servant code will effectively counteract the negative effects of politicisation of the public administration on the sub-national policy and strategy integration capacity.

National government

* This is not an exhaustive list of stakeholders. It needs to be adapted to and completed for the local context. The aim of this Action Plan is to instigate discussion and take-up of the recommendations proposed. Enhance the role of the public employment service in making local employment strategies effective WHAT Strengthen the CEAs capacity to make better use of the POSDRU. To act as co-ordinator and leading network partner at the county level, the CEAs will need in-house expertise in ESF funding and an upto-date overview of all employment projects in the county and the wider economic region. HOW Close collaboration between CEAs and the permanent technical secretariats of the partnership structures (STPs) is recommended. Possibilities to hire an additional staff member specialised in POSDRU should be reviewed. Secondment arrangements between NEA, the Management Authority and the Intermediary Bodies should be taken into consideration. Existing obstacles to outsource counselling to NGOs and private service providers should be removed, as outsourcing can be an effective way to achieve counsellor-unemployed ratios that allow for individual action plans, in particular for difficult target groups. It is important to understand that the regional and local needs cannot be established by centralised instruments only. There need to be some degree and kind of flexibility to allow for local action and providing CEAs with a 10% NEAs WHO CEAs, NEA, STPs, Management Authority, Intermediary Bodies

Simplify performance management and introduce gradual flexibility in the budget

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free budget could be discussed as an initiative to this end. Enhance relationships with schools, universities and employers. To gain a better understanding of current and future supply and demand and the skills needs, the CEAs will have to be more pro-active in approaching schools, local universities and employers, and maintain close relationships. Early orientation measures, short-term work placements for school students, and knowledge and technology transfer schemes for graduate students and local SMEs could be possible through ESF-financed projects. Co-operation between the public employment service and private temporary work agencies. Possibilities for collaboration between the CEAs and private temporary work agencies should be reviewed as an option to activate and integrate the longterm unemployed. CEAs, NEA, chambers of commerce, business associations, universities, schools, vocational education institutions, Regional Pacts, County Partnerships, STPs NEA

* This is not an exhaustive list of stakeholders. It needs to be adapted to and completed for the local context. The aim of this Action Plan is to instigate discussion and take-up of the recommendations proposed. Enhance the effectiveness of institutionalised partnership structures WHAT Build capacities of STPs. HOW It is important to provide appropriate assistance and capacity building, also with regard to a strengthening of the relationships and communication with the partnership structures at regional and county level. A re-activation of the former working group structures could be considered. Create a STP co-ordination unit at the national level. The creation of a co-ordination unit of STPs at the national level would ensure appropriate assistance and capacity building through the application of common guidelines. Review the current system of performance management ten projects in three years as main indicator for success may not be sufficient to measure performance and identify areas for improvement. A national level co-ordination unit could facilitate exchange and learning amongst the eight STPs. A joint webportal could be a useful instrument too. Involve the Regional Pact in monitoring and evaluating PRAO and PRAI. It is important that the Regional Pact is involved in monitoring and evaluating PRAO and PRAI. Managing Authority, Intermediary Bodies Managing Authority WHO Managing Authority

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Strengthen the County Partnerships and decentralise decision-making. Solid County Partnerships and STPs will be important for expanding the partnership approach to the municipal, town and commune level.

A shift in the decision making towards the local level, offering the County Partnerships more freedom in priority setting, planning, (pre-) selection and monitoring of projects, should be considered for an effective local employment strategy. Possibilities to further formalisation of the County Partnerships, for example in form of an association, should be reviewed as an option to counteract politicisation, and to enhance the County Partnerships role in local governance. Devolution to the regional level would not have the same effect, as regions are too big (geographic distance, diversity of counties) and little more than statistical units. Local empowerment and capacity building can significantly increase the effectiveness of projects. Existing initiatives to involve stakeholders at the municipal and commune level in the design, implementation, monitoring and evaluation of local employment development projects should be enhanced, expanded and systematised. Call could be organised in four phases. 1. Phase: project ideas are submitted to the County Partnerships, preselection 2. Phase: preparation of full project proposals, applicants are helped by STPs to comply with the National Employment Programme, POSDRU (or other sources of financing) 3. Phase: County Partnerships, in accordance with local government authorities, select best project proposals. 4. Phase: County Partnerships submit a portfolio of projects to Managing Authority for final approval. Key selection criteria could be: responsiveness to local labour supply and demand, targeting of vulnerable groups, and degree of policy and strategy integration.

Managing Authority, Intermediary Bodies, Regional Pacts, County Partnerships

Strengthen a systematic involvement of stakeholders at the municipal and commune level in employment projects.

County Partnerships, Regional Pacts, stakeholders at municipal, town and commune level

Launch a call for proposals at county level targeting municipalities, communes and towns.

County Partnerships, STPs, Regional Pacts, Intermediary Bodies

* This is not an exhaustive list of stakeholders. It needs to be adapted to and completed for the local context. The aim of this Action Plan is to instigate discussion and take-up of the recommendations proposed.

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ANNEX 2 SURVEY OF LOCAL PARTNERSHIPS IN ROMANIA

In the framework of this project a survey was conducted amongst the 33 County Partnerships, the 8 Regional Pacts for Employment and Social Inclusion and the 8 Regional Consortia. A database of more than 900 people, who have been involved in the partnership building process as outlined in Chapter 5, served as population. The questionnaire was accessible through the OECD website from 10 October 2009 to 22 October 2009 and from 18 November 2009 to 10 December 2009. The survey collected a total of 71 responses. The survey questions and the result analysis have been prepared by Maria-Joao Filgueras Rauch in the framework of this review project. The online survey included 6 blocks with a total of 31 questions. These and a discussion of the answers are presented below.

Block 1 Strategic Benefits: Please mark from 1 to 5 (the best) in the following table which strategic benefits you think that your partnership is taking from the joint work: (one number can be used more than once).
Question 1 Is there a common set of strategic objectives that were defined within the partnership? 2 Is there a sense of ownership and commitment emerging amongst the members of the partnership? 3 Legitimacy of the partnership as a negotiation and policy design partner has been achieved? 4 Public Funds ESF are being used more efficiently thanks to the existence of partnerships? 5 Is there a positive development in the relationships of the members based on trust? 6 Has this trust improvement created a new definition of roles for the different institutions present in the partnership? 7 Has the identity of the territory improved since the partnership is working? 8 Are the partnerships involved in the elaboration of the strategic documents like: - A county development plan - PRAO? - Others? 9 If you identify other strategic benefits not listed here please add them here Score

Interpretation. There is a clear tendency to recognize that a set of common strategic objectives were established within the partnership and that the partnerships are involved in the drafting of the strategic documents like the PRAO. However this can be also an indication that most of the respondents belonged to the Pact and Regional Consortia and not to County Partnerships as the latter were only marginally involved in strategic document preparation. It seems that TRUST among the members of the partnerships is growing positively and they valorize the joining efforts of the partnership approach but the ownership requires an additional capacity building effort. As it would be to expect legitimacy as a policy design partner is still weak needing to create a better ownership with clear re-defined roles for each partner as well as a stronger identification with the territory. It is perceived that the partnership structures are helping to make a better use of the ESF.

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Detailed responses

Block 2 Operative Benefits: Please answer the following questions on what you think are the operative benefits from partnership working by marking from 1 to 5 (the best).
Question 10 Is there a better use of resources (no duplication for instance), being able of doing more by using the resources of all members in a rational way since the partners are working in partnership? 11 Are the activities of the partnership addressing more closely the real problems and needs of the territory? 12 Are the different competences of the various partners an added value to solve multi dimensional/ complex problems? 13 Is the knowledge and experience of the different partners creating an important learning effect and empowering the members? 14 Are the partners committed and getting together results paving the way to sustainability? 15 Are there any other strategic benefits not listed here? Score

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Interpretation of the answers: The opinion about partnerships having generated a more rational use of the resources of the different partners and about a better coordination of the available competencies is still weak. However the empowering and knowledge effect seems to be already strong as well as the feeling that with the multidimensional intervention of the partnerships that the problems addressed are closer to the real needs of the territory. Commitment for a sustainable future being paved by the results of the partnership work is still limited but tending to grow. Detailed responses

Block 3 Organisation and Management: Please answer the following questions on what you think are the main characteristics of organisation and management in your partnership by marking from 1 to 5 (the best).
Questions 15 Is there a clear and transparent structure? 16 Are all the organisations involved that should be involved? 17 Is there a clear leadership? 18 Is there a clear set of rules for the functioning of the partnerships? 19 Are there supporting structures that can facilitate and dynamise the partnership working basis? 20 Are there capacity building plans for the members of the partnerships? 21 Are there also capacity building actions for the supporting bodies (STP)? Score

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Interpretation of the answers: The answers point out to a general satisfaction with the structure and organization of the partnership (again it reinforces the feeling that the respondents are mostly from Regional Pacts since there is the Pact Charta and a Memorandum of Understanding signed by all members of the Pact while for the County Partnerships this is not so clear). The same seems to apply to a clear leadership structure. In spite of that there are still a significant number of responses that consider a need of improvement. Regarding the involvement of partners it is clear that the partners feel that there is a differentiated landscape with some more committed than others as well as the need to make an additional effort to get other partners on board. In relation to the supporting structures (STP) it seems that the opinion is that the work being done is still not very effective and there is still room for improvement in what regards the capacity building either for STP but also the members of the partnerships to get more competencies related with work in partnership. There are some planned activities of capacity building but this seems to be considered still not enough.

Block 4 Funding and sustainability system: Please answer the following questions by marking from 1 to 5 (the best).
Question 22 Is the partnership sustained by public funding? 23 Are there mechanisms to create self-sustainability? 24 Do partnership members contribute from their budget? 25 Are STPs an important instrument to ensure the partnerships sustainability? 26 Is there a delivery plan with a budget allocation for each year? Score

Interpretation of the answers: There are clear tendencies regarding the current financing system of the partnerships being entirely based on public funding; there is no other financial contribution from the members of the partnerships. Hence, it seems that there are no mechanisms in place to create a sustainable development framework for the partnerships, leaving aside project financing. STPs are considered an important instrument to achieve sustainability. 89

Block 5 Monitoring and Evaluation: Please answer the following questions by marking from 1 to 5 (the best).
Question 27 Is there a Monitoring system planned along with the partnership work? 28 Are there mechanisms being put in place to have regular evaluation of the partnership performance? 29 Is it planned to incorporate the results of the evaluation in the further development of the partnership as a learning instrument? 30 Are there rules for documentation and dissemination of the work of the partnerships? Score

Interpretation of the answers: The rating on this set of questions was rather, which probably shows that in general monitoring and evaluation are considered not yet sufficiently developed or effectively working. This seems to also hold with regard to whether there are clear rules for reporting and dissemination or sharing of results. Some of the comments pointed out the hope that having STPs will bring improvements in the next future.

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Block 6 Summing up: Following these stages of development of partnerships please mark which of the following defines best the nature of the partnership you are involved in.
Co-existence: a clear division of tasks that are performed independently Co-operation: if partners need some support of other partners they normally get it if not interfering with the own work of that partner Co-ordination: partners recognize that to make some changes profiting from the complementarity of competences and resources of partners is positive. They co-ordinate the own resources in a common use. Collaboration: working together, even if not all partners at the same time Co-ownership: all partners feel totally responsible for all the work of the partnership. All have the ownership feeling.

Interpretation of the answers: Most of the answers (39%) point out to an advanced stage of development of the partnership work: Collaboration in which all partners are already working together. Moreover adding those that think to be already in the most developed stage the total amount is over 50%. Around 36% of the respondents are of the opinion that the partnership works already on a scheme of summing up individual efforts but in an independent way. But there is a wide distribution of views involved all the stages what can be an indication of a certain confusion about partnership work and real benefits what reinforces the need of additional capacity building actions.

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ANNEX 3 LIST OF PARTICIPANTS IN REGIONAL ROUND TABLES

BUCHAREST, 7 September 2009

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Name ALEXANDRU PETRU FRTEAN TANIA GRIGORE SIMONA BORDEIANU MAGDA FILIP CRISTINA MEREU RAMONA COJOAC CRISTINA PREDA CRISTINA IOVA ADELA DOROBANU LILIANA ZAHARIA VASILE MIRCIU Institution State Secretary, MoLFSP General Directorate Employment Policies, MoLFSP Employment Directorate, MoLFSP External Relations and International Organizations, MoLFSP Employment Directorate, MoLFSP National Agency for Employment Programming and Program Assessment Compartment, AM POSDRU AM POSDRU ESF Coordinating Directorate Strategic Economic Projects, Foreign Affairs Ministry General Directorate Industrial Policy and Competitiveness, Ministry of Economy and Finance General Directorate Industrial Policy and Competitiveness, Ministry of Economy and Finance General Directorate Industrial Policy and Competitiveness, Ministry of Economy and Finance National Agency of Human Resources Specialists, Contact point OECD watch National Association of Human Resources Specialists Contact point OECD - watch Public Manager, Public Decentralised Services, Ministry of Administration and Interior

12.

GABRIELA PRVU

13.

SILVIA STANCEA IOANA MNIL

14.

15.

MARIANA PETCU

16.

DANIELA SGRCITU

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VASLUI County, 8-9 September 2009

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21 Name BUCHIDAU DAU CHIRVASA CRISTINA CROITORU GHEORGHE MIHNEVICI LANDIANA VOICU HARALAMBIE CARAGATA VALERIU DIMOFTE ALINA PECHEANU DANUT MOCANU RAMONA MARIA COSTEA ADRIAN SALARU MARIANA TOFAN GEANINA ADRIAN IOAN CRLAN BABA ELENA SCOBAI MONICA CIMPIANU DANIELA VASILIU CRISTINA PARASCHIV VALENTINA BACU DORIN MIHALACHE OVIDIU APETREI DANIEL Institution Vaslui Labour Inspectorate Vaslui open regime prison Nat. Confederation of Romanian Free Trade Unions Fratia Vaslui branch Vaslui County School Inspectorate. Vaslui Labour and Social Protection Directorate Vaslui City Hall Vaslui County Prefecture Vaslui County Statistical Directorate Vaslui County Social Benefits Agency Vaslui Chamber of Commerce, Industry and Agriculture Vaslui City Hall Vaslui City Hall Vaslui Employment Agency Vaslui Employment Agency Vaslui Employment Agency Vaslui Employment Agency Vaslui County Council EUROPEAN PROFILE AT Project Nord East Regional Development Agency Vaslui Employment Agency Neamt County Prefecture

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Mure County, 10-11 September 2009

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. Name and surname of the participant GIUREA GABRIEL CHITIC TEFANA TELESPAN CONSTANTIN TOMA VALERIU BUGNAR VASILE CSISZAR LUMINIA BARABA BIANCA MARIA ENGI CORNELIU FINICHIU ANCA PNESCU TIBERIU FARCA REGHINA SPOREA EUGEN ANA-MARIA LIRCA CORE LUMINITA TEF TIBERIU PUNI SILVIU BATAG STELA BACULEA OFELIA DORIS RADU FRCA NICOLETA TORZSA ILDIKO GERMAN CRINA MAIOR MARTA FAKAB ENIKO RADU GROZA COCI CLIN Institution Romanian-German University Romanian-German University Romanian-German University Sibiu Labour and Social Protection Directorate Alba Employment Agency AGROM-RO Trgu-Mure Adults Vocational Training Regional Centre Alba Employment Agency Braov Employment Agency Harghita Employment Agency Mure Employment Agency Intermediary Body POSDRU Mure County Council Mure Adults Vocational Training Regional Centre AGROM-RO SMEs Local Council Mures Chamber of Commerce and Industry Mures Chamber of Commerce and Industry Mure County Council National Confederation Cartel Alfa Popular University Trgu Mure Municipality Trgu Mure Municipality Trgu Mure Municipality Mures Labour and Social Protection Directorate National Confederation of Romanian Free Trade Unions Fratia

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