European Social Fund (ESF)

Small Business

The European Social Fund (ESF) is one of the most important funds of the European Union. It is the oldest of the so-called Structural Funds and was created as early as 1957. The European Regional Development Fund (ERDF) for instance which is also one of the most important instruments of the EU to stimulate economic and social cohesion was established only in 1975. Just like the ERDF, the ESF puts a major emphasis on reduction of disparity between the European regions and promotion of economic development. However, it primarily focuses on increasing employment, improving working conditions, stimulating mobility of the workforce, helping businesses and workers to adapt to changes, and improving social status and employment opportunities of less-favoured individuals and those who are facing difficulties finding employment such as people with disabilities, older workers, young people, women and migrants.

Since its establishment, the ESF is primarily focused on increasing the employment rate in the European Union, however, it has adapted its priorities over the years to meet specific challenges on the employment market. Its current seven-year programme (2007-2013) remains focused on improvement of the employment opportunities, especially in the least developed European regions devoting over 80 percent of the total ESF funding to this objective. The second of the two most important objectives of the current ESF seven-year programme puts an emphasis on stimulation of regional employment, competitiveness and attracting new investments. A lot of attention is also paid to the so-called European Social Agenda the main objective of which is modernisation of the European business model and labour market while protecting the most vulnerable social groups. In the recent years, the ESF policy also emphasizes the so-called flexicurity concept which stimulates mobility and adaptability of the workforce.


As much as 10 percent of the total EU budget is dedicated to funding projects which improve employment through the ESF which translates into 75 billion euros. The distribution of the ESF funding varies from one region to another and primarily depends on the GDP per capita in comparison to the EU average GDP. Regions with the lowest GDP per capita receive more funds than the wealthy regions which complies with the objectives of both the ESF as well as the Regional Policy of the EU which strive to improve economic and social situation in the poorest regions in order to reduce the disparity within the EU. Both the strategy and distribution of the ESF funds are determined in Brussels, while the implementation of the ESF objectives and funding of the projects that meet its objectives are left over to the EU member states and their regions. In England, the ESF funds are managed by three organisations – the Department for Work and Pensions, Skills Funding Agency and the National Offender Management Service.

Since the implementation of the ESF goals can be achieved by a wide range of projects, the beneficiaries of the funds come from both public and private sectors. They include governmental agencies, online marketing companies such as Reboot Online Marketing Ltd, regional and local authorities, educational institutions as well as trades unions, works councils, industry associations and even individual workers and companies.