Policy brief: Boosting Essential EU Social Services Through the SGEI Decision Reform

The EU Commission SGEI Decision (Services of General Economic Interest) has been vital for acknowledging our members' work in integrating underrepresented groups, which requires increased funding due to higher upfront costs and limited profitability. The ongoing reform, while primarily focused on housing, must also enhance the legal clarity of existing social service provisions through improvements to the text and accompanying documents. 

Despite its potential, the SGEI Decision is underutilised to support social economy actors, a finding echoed by EU research and confirmed by our members. Major obstacles include restrictive interpretation, lack of legal clarity, and public authorities' poor understanding of social economy entities. Circular social enterprises are also unfairly denied funding because the ecological aspect of their reuse and repair—the very means of providing work integration and social inclusion is misinterpreted. The 2023 Council Recommendation on the Social Economy (C/2023/1344) underscores the challenges involved, highlighting the significance of improving access to such opportunities. 

Our recommendations:

• Signal to Member States that supporting social economy actors with higher thresholds and entrustment is aligned with EU policy objectives, as most recently attested by the EU Recommendation C/2023/1344. 
• Recognise the diversity of social service providers, particularly non-profit and social economy entities, which often require higher threshold support. 
• Prevent circular social enterprises from being unfairly denied SGEI funding when their reuse/repair activities are the essential means for delivering work integration, training, and social inclusion services. 
• Ensure consistency with the SGEI de minimis Regulation regarding non-profit entities, which are key social service providers. 
• Ensure that costs from supporting activities that are essential for the public service obligation (e.g., circular operations for work integration SGEI) are recognised as legitimate cost components.