Enabling Public Disclosure Authorized Inclusive Growth in Hungary Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Directions for Improving the Planning and Implementation Framework of Social Inclusion Interventions at the Local Level Table of Contents

Acknowledgments ...... 4

Abbreviations and acronyms ...... 5

Executive summary ...... 7

1 Introduction ...... 11

2 Inclusive growth in Hungary: A prerequisite for economic sustainability ...... 13

3 The evolution of LEPs ...... 16

4 The institutions behind the framework ...... 19 4.1 Actors, roles, and responsibilities at the national level ...... 19 4.2 Actors, roles, and responsibilities at the district and county levels ...... 20 4.3 Actors, roles, and responsibilities at the local level ...... 21 4.4 Key bottlenecks for effectively planning LEPs ...... 22 4.5 Key bottlenecks for effectively implementing LEPs ...... 25

5 Learning from experiences, part I: Local social inclusion frameworks in the Czech Republic, Poland, and Slovakia ...... 29 5.1 Poland’s Social Inclusion Program (part of the Poland Post-Accession Rural Support Project—PARSP) ...... 29 5.1.1 Context ...... 29 5.1.2 Approach ...... 29 5.1.3 Lessons learned ...... 31 5.2 The Czech Republic—The Agency for Social Inclusion ...... 31 5.2.1 Context ...... 31 5.2.2 Approach ...... 32 5.2.3 Lessons learned ...... 32 5.3 Slovakia’s Comprehensive Approach ...... 34 5.3.1 Context ...... 34 5.3.2 Approach ...... 34 5.3.3 Lessons learned ...... 35

6 Learning from experiences part II: Delivering equal opportunity activities at the local level in Hungary ...... 37 6.1 What makes a practice “good”? ...... 37

In the spotlight: Social economy ...... 44 6.2 Global lessons from the social and solidarity economy ...... 45 6.3 Social economy in Hungary—and its lessons ...... 45 6.4 Box 1. Lessons from Kiútprogram and Autonómia’s SIMS program ...... 47 6.5 Looking ahead ...... 47

7 Main findings and recommendations ...... 49 7.1 Recommendations for streamlining and revitalizing LEPs...... 53

2 7.2 Recommendations for developing an equality safeguard for EU-financed LEP activities in towns with country rights ...... 56 7.3 Recommendations for developing county equality programs (CEPs) ...... 57

8. References ...... 61

Annex I. Case studies ...... 64 Porcsalma: A safe start into life ...... 65 Integrated education in Ács ...... 69 The farming village of Gyulaj ...... 72 Target group: ...... 72 Social Economy in Katymár ...... 77 Public work and EU Funds in Karcsa ...... 84 Kiútprogram: Income generation in Szabolcs-Szatmár-Bereg County ...... 87 Social rehabilitation and housing integration in Pécs ...... 93 Békéscsaba, a city of cooperation ...... 98 The thoughtful town: Jászfényszaru ...... 102 Alsómocsolád, a village of entrepreneurs ...... 106

Annex II. RAS implementation roadmap—consultations and field visits ...... 110

3 Acknowledgments

This report was prepared by a World Bank team composed of Sándor Karácsony, Miklós Kóródi, Ádám Kullmann, Valerie Morrica, and Nóra Teller, under the guidance and supervision of practice managers Nina Bhatt and Andrew D. Mason. The team would like to thank György Molnár from the Institute of Economics of the Hungarian Academy of Sciences for his contributions to Section 6. The team would also like to express its gratitude to peer reviewers Joost de Laat, Maria Beatriz Orlando, Katalin Szatmári, and Andor Ürmös for their helpful inputs and technical comments during the review process. The team is particularly grateful to counterparts from the Government of Hungary, in particular Csaba Andor and László Ulicska from the Ministry of Human Capacities and Katalin Ferdinandy from the Türr István Training and Research Institute. Their guidance, support, and comments were invaluable during the preparation of this report. The team was further supported by Isadora Nouel, András Tamás Torkos, and Andrei Zambor, and editorial work was provided by Lauri Scherer.

This report has greatly benefited from several rounds of consultations with local-level Hungarian stakeholders (mayors, municipality employees, managers of social inclusion projects, civil society representatives) in a number of Hungarian locations. Annex II of this report provides a detailed account of visits, locations, and a list of stakeholders who were consulted.

4 Abbreviations and acronyms

ÁEEK National Health Care Service Centre

ASI Agency for Social Inclusion

BM Ministry of Interior

CEP county equality program

CSO Central Statistical Office

EC European Commission

EFOP Human Resources Development OP

ERDF European Regional Development Fund

ESF European Social Fund

ESIF European Structural and Investment Funds

EU European Union

GINOP Gazdaságfejlesztési és Innovációs Operatív Program (Economic Development and Innovation Operational Program)

HRDOP Human Resources Development Operational Program

KLIK Klebelsberg Institutional Management Center (Klebelsberg Institutional Management Center)

LEP Local Equal Opportunity Plan

LLTK Lechner Lajos Knowledge Center

LSCA local strategies of comprehensive approach

M&E monitoring and evaluation

MfNE Ministry for National Economy

MHC Ministry of Human Capacities

MIS Management Information System

MoI Ministry of Interior

NAPSI National Action Plan on Social Inclusion

NEET neither in employment education or training

5 NGM Ministry for National Economy

NRP National Reform Program

NSIS National Social Inclusion Strategy

OP Operational Program

OPGRC Office of the Plenipotentiary of the Government for Roma Communities

ORÖ National Roma Self-Government

PARSP Post-Accession Rural Support Project

SIP Social Inclusion Program

TA technical assistance

TÁMOP Társadalmi Megújulás Operatív Program (Social Renewal Operational Program)

TKKI Türr István Training and Research Institute (Türr István Képző és Kutatóintézet)

TOP Transport Operational Program

UNDP United Nations Development Programme

WB World Bank

6 Executive summary

The 2014–2020 financial framework of European Structural and Investment Funds (ESIF) provides a historic opportunity for the Government of Hungary to facilitate social and economic inclusion of the most marginalized and disadvantaged Hungarians through targeted interventions at the local level. This report aims to assist this task by carrying out a comprehensive assessment of Hungary’s recent experiences with rolling out the Equality of Opportunity planning and implementation framework for addressing the most pressing social inclusion challenges at the local level. Against this backdrop, the study’s objective is twofold: (i) to identify key constraints and bottlenecks in planning and implementing Local Equal Opportunity Plans (LEPs); and (ii) to develop practical recommendations for how the planning and implementation framework can be adapted to address these bottlenecks and produce better and more sustainable results1.

The development of local strategic documents has become a core local responsibility in Hungary over the last few years. Many municipalities have prepared sectoral policy strategies such as equality plans in public education, local service delivery plans, integrated urban or settlement development strategies, and various related implementation plans. LEPs are part of this extensive planning framework. The two common features of all these strategic plans are that they had to be produced mostly on the basis of intersectoral cooperation; and are linked with or are conditional for receiving funding. Financial incentives have been a key driving force for municipalities to focus their attention on developing LEPs. To support local governments in the plans’ development and to ensure their overall quality, the state administration, through the Türr István Training and Research Institute (TKKI), has offered a set of quality-control tools, mostly in the form of trainings and technical assistance (TA) through a network of regional mentors.

Three key bottlenecks have been identified with regard to planning and implementing the LEPs:

(1) Capacity bottleneck: There is insufficient capacity to adequately analyze, plan, and implement relevant and complex social inclusion interventions. The TA (mentoring and external monitoring) provided by TKKI offers only limited help because it focuses more on the production of the plan than on implementation.

(2) Community engagement bottleneck: The planned and implemented activities are not sufficiently connected to communities’ local realities and real needs; this is due to a lack of consultation and community engagement. Interactions with civil society organizations and communities are often limited to periodic consultations

1 The report has been finalized in Fall 2015: at that point we did not have information about the status of the district level planning framework (including district equal opportunity plans) or about calls for proposals in the 2014-2020 period.

7 rather than ongoing interactions throughout a LEP’s planning and implementation.

(3) Financing bottleneck: Particularly small municipalities have very limited off-the- top funding available from the central government, through which they are only able to finance a very limited set of services. Additional and social inclusion activities are mostly financed through externally (EU-) financed self-standing projects, which are often ad hoc, opportunistic, and do not adequately respond to complex and multidimensional social inclusion challenges. The funding bottleneck also creates sustainability concerns, as activities end once the project closes.

A review of experiences with developing and implementing complex social inclusion frameworks and interventions in the Czech Republic, Poland, and Slovakia, as well as the case studies from Hungary that were developed for this report, provide a number of relevant lessons for how these bottlenecks can be addressed during the planning and operationalization of LEPs in Hungary. These include the need for continuity and long-term political commitment and the necessity to allocate resources for appropriate TA throughout all stages of the project cycle. Effective programs must be based on genuine local demand; long-term planning (that is, groundwork) needs to precede project development. In that context, it is equally important to take the local political context into account. Interventions’ success will depend on the effective use of both external financial resources and the municipality’s own resources. Moreover, given the capacity and financing bottleneck most municipalities face, it is impossible to address complex inclusion challenges without actively and meaningfully involving local CSOs. Finally, for interventions to have a lasting impact, they should be accompanied by intensive social and community work.

The main findings of the report are intended to inform any revisions and modifications that will be made to the overall LEP planning and implementation framework at the national level. For that, the following considerations should be taken into account:

To address the capacity bottleneck:

 A broad political and public consensus on strategy content and implementation structures, processes, and costs is necessary to ensure the continuity and successful impact of national social inclusion strategies.

 The national entity appointed to manage the implementation of LEPs needs to be equipped with a clearly defined mandate, authority, and sufficient financial resources to manage the complete project cycle, from planning through implementation and monitoring and evaluation (M&E).

8  Sufficient resources for meaningful TA need to be earmarked to adequately support municipalities not just during planning but also the implementation stage to ensure that strategies have a chance of actually being implemented.

To address the community engagement bottleneck:

 Formal platforms for continuous stakeholder engagement and interactions need to be established, with a particular focus on engaging the most marginalized population groups to create ownership and sustainability.

To address the financing bottleneck:

 Municipalities should be encouraged to use their own limited budget to finance the preparatory work—with a focus on “soft” issues such as community mobilization and addressing local tensions around social inclusion issues—which will lay the groundwork for accessing funds for more complex interventions.

 A central database can provide access to relevant resources, including information on funding sources to effectively implement LEPs.

Finally, the report proposes three concrete recommendations that will strengthen the LEPs’ role in contributing to improved social inclusion outcomes at the local level:

 Strengthen the LEPs’ role as an “equality safeguard” for EU funds. This will help ensure that future investments for equal opportunities and social inclusion do not inadvertently widen and deepen the existing exclusion challenges.

 Streamline the LEPs’ planning and implementation framework so that it adequately reflects responsibilities, capacities, and resources.

 Adopt the proposal to introduce county equality programs to reflect the actual division of competencies in Hungary, which will contribute to an improved vertical and horizontal integration of LEPs.

In conjunction with these recommendations, the report also offers inputs toward developing and implementing social economy interventions, and leveraging these interventions to address prominent social challenges at the local level. The report finds that while several strategic issues should be addressed to better fit social economy interventions into the landscape of social inclusion policies and programs, there are opportunities in the short term: LEPs can be an effective instrument for identifying local-level employment or skills gaps or social service capacity constraints that may be best served through social economy vehicles, and subsequently be used to develop and deliver social economy interventions.

Hungary has developed an ambitious and complex framework for addressing social inclusion and equal opportunity challenges at the local level. Addressing the identified bottlenecks

9 and implementing the proposed recommendations could considerably strengthen municipalities’ ability to actively use the framework to plan and implement adequate and effective social inclusion interventions. For this to work, the participation and commitment of all levels of government will be necessary.

10 1 Introduction

The 2014–2020 financial framework of European Structural and Investment Funds (ESIF) provides a historic opportunity for the Government of Hungary to facilitate social and economic inclusion of the most marginalized and disadvantaged Hungarians through targeted interventions at the local level. This report aims to assist this task by carrying out a comprehensive assessment of Hungary’s recent experiences rolling out the Equality of Opportunity planning and implementation framework for addressing the most pressing social inclusion challenges at the local level. Against this backdrop, the study’s objective is twofold: (i) to identify key constraints and bottlenecks in planning and implementing Local Equal Opportunity Plans (LEPs); and (ii) to develop practical recommendations for how the planning and implementation framework can be adapted to address these bottlenecks and produce better and more sustainable results. The key hypothesis that guides this report is that the structures that have thus far been developed for LEP planning and implementation are not sufficient to enable effective delivery of equal opportunity measures at the municipal level, and thus cannot achieve sustainable results. Therefore, the guiding question for the report is: What are the institutional, resource, and capacity bottlenecks and gaps for improving equal opportunity outcomes at the local level, and how can the central level framework for LEP planning and implementation be adapted and improved to address these challenges?

Data and information that informed this report come from a diverse set of primary and secondary sources. 2 A comprehensive set of stakeholder consultations were also carried out, including key informant interviews, roundtable discussions with governmental and nongovernmental stakeholders at national and municipal levels, and field trips to various social inclusion projects in Hungary. A full list of the interviews, stakeholder consultations, and project visits can be found in Annex II.

The report is structured as follows: Section 2 offers a brief snapshot of Hungary’s macroeconomic situation and the most prominent equal opportunity challenges currently facing the country. This provides the backdrop for the presentation of the equal opportunity planning, implementation, and monitoring framework in Section 3. This is followed by an institutional “gap analysis” on the key challenges that arise in the context of planning and implementing equal opportunity plans. The gap analysis details the roles and responsibilities of the various stakeholders at the central, district, and local level, followed by an assessment of the key challenges that municipalities encountered during LEPs’ planning and initial implementation phases.

The objectives of Sections 5 and 6 are to learn from experiences both inside and outside of Hungary. Section 5 presents recent experiences and lessons from Central Europe regarding

2 The report has been finalized in Fall 2015: at that point we did not have information about the status of the district level planning framework (including district equal opportunity plans) or about calls for proposals in the 2014-2020 period.

11 approaches to facilitate the planning and delivery of integrated social inclusion interventions at the local level. Section 6 turns the focus back to Hungary and establishes a proposed set of common basic criteria to assess and identify social inclusion best practices at the local level. It presents the main findings from the set of case studies that were produced for this report. These case studies showcase local experiences with the implementation of social inclusion activities, from high- and low-capacity urban areas as well as rural localities. A “spotlight” on the social economy provides some background on this widely referenced— and often misunderstood—concept and identifies some global lessons as well as experiences from Hungary. Section 7 presents the main findings regarding how the three key bottlenecks related to LEP planning and implementation, and offers three comprehensive recommendations to improve the role LEPs can play in safeguarding equal opportunities at the local level. Each of the three recommendations contains an overview of the intended objectives, key elements that need to be implemented, and an overview of expected costs and benefits.

This report is accompanied by two related reports: Hungary: Measuring Inclusive Growth for Enhanced Development Impact: Targeting and Monitoring of EU Co-funded Social Inclusion Activities at the Subregional Level, and the Handbook for the Implementation of Local Equal Opportunity Plans in Hungary. Taken together, these three pieces provide policy makers at all levels of government with insights, considerations, and actionable advice on how to make Hungary’s Equality of Opportunity framework more effective, efficient, and inclusive—and ultimately contribute to improved equality of opportunity for all citizens. For this to work, the political commitment and participation of all levels of government will be necessary.

12 2 Inclusive growth in Hungary: A prerequisite for economic sustainability

Hungary has demonstrated rapid income growth over the last two decades—yet it still has a long way to go to catch up with the EU15 in terms of overall living standards. In 1995 Hungary’s GDP per capita stood at about 45 percent of the EU15 average, and by 2013 it had risen to 65 percent (see Figure 1). In order to deliver living standards that are comparable to the EU15, Hungary will need to sustain rapid economic growth over the coming decades. However, Hungary’s long-term economic growth prospects are put at risk by demographic change: Hungary is projected to see a decline (by more than 10 percent between 2010 and 2050) and significant aging of its population (see Figure 2). Despite the income growth, more than one-third of Hungarians remain at risk of poverty or social exclusion. Moreover, between 2008 and 2013, the proportion of children growing up in a household at risk of poverty and social exclusion increased sharply, from around 33 percent to 43 percent.

Figure 1. Hungary’s income convergence: Sizable catch-up, but a long way to go

100 GDP (PPS) per capita (as percent of EU15 average) 90 80 70 60 50 40 30 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

BG CZ EE HR LV LT HU RO PL SI SK

Source: World Bank Staff estimates using Eurostat data.

With fewer workers and more old-age dependents, labor productivity improvements in terms of employability and skills are key for continued economic growth; making better use of Hungary’s human capital needs to be at the forefront of growth policies. Although both the employment rate and the activity rate increased in 2014, they are still low by international comparison; while activity is increasing rapidly (standing at 67.8 percent in the third quarter of 2014), it is still below the level of regional peers. Moreover, while the unemployment rate was at an all-time low in 2014, the disparity in employment opportunities of high- and low-skilled workers is larger than in most EU countries: low-skilled workers have a very low employment rate (38.2 percent; the EU average is 51.4 percent for 20–64 year olds). In the case of 25–49 year olds, the difference between the employment

13 rate of low-skilled workers and the general population is 26 percentage points—all of which suggests significant room for improvement.

Even more worryingly, a significant number of young Hungarians are struggling with the transition from school to work and are idle. More than 15 percent of 15–24 year olds are neither in employment education or training (NEET), and there are recent increases in early school leavers, according to Eurostat data. These figures are particularly sobering in light of the fact that mitigating the risks an aging and declining population pose to economic growth requires expanding the number of workers. Measures to enhance productivity (for example, improving skills of the current and future workforce) should therefore accompany these interventions.

Figure 2. Hungary’s population is aging and shrinking

Source: World Bank staff estimates using UN Population Prospects. Medium variant.

The main challenge of developing active labor market programs in Hungary has been to increase the labor market participation of specific disadvantaged groups, such as low-skilled workers, older workers, young career starters, women with small children, and the disabled (World Bank, 2014). Reforms have tried to make work more attractive to the inactive and to generally promote employment. These measures have been followed by the expansion of a public works program; to a large extent (approximately 1.5 percentage points), Hungary’s all- time low unemployment rate in 2014 was attributable to this program (EC, 2015). As an alternate way to increase employment—particularly among disadvantaged groups—as well

14 as a way to transition from public works employment to the primary labor markets, the Government of Hungary has been exploring the possibility of expanding the employment potential of social economy interventions: this report’s spotlight section offers inputs to this field.

The underlying reason to have effective measures that target skills and employability is to improve the social inclusion of the most marginalized and disadvantaged groups, particularly via interventions for the younger generations, which can have long-term positive impacts. Take, for example, Hungary’s sizeable Roma population: according to the 2011 census, 316,000 Hungarians of Roma ethnicity live in the country, representing approximately 3 percent of the total population. However, other estimations indicate that their real number is much larger, accounting for 7.5 percent of the population (Balog, n.d.). According to the Regional Roma Survey (UNDP, World Bank, and EC, 2011), more than 38.2 percent of Roma are younger than 15, compared to only 19.8 percent of non-Roma. Given the current demographic trends, the share of Roma in the working-age population is expected to increase in the coming years. In addition to being “the right thing to do” to support a cohesive society, interventions to increase young Roma jobseekers’ skills, employability, and integration into the labor market will be essential for contributing to Hungary’s continued growth, as well as its future competitiveness in the global economy.

15 3 The evolution of LEPs

LEPs are part of Hungary’s equality-oriented development policy, which has continuously evolved over the past decade. Legislation3 introduced in 2003 required local governments and schools to prepare educational equality plans. In that context, a set of social indicators was introduced to facilitate the targeting of disadvantaged children and to highlight where segregation exists. While the education equality plans have a distinct ethnic dimension—a large share of Roma children are targeted—no specific ethnic indicators were included. Equality experts were trained and commissioned by the Ministry of Education to help prepare the plans and to provide quality control (such experts have formal veto rights). Supervisors commissioned by the Ministry assisted the equality experts and had the final say in case of disputed issues. Schools’ access to EU funds was conditional on two elements: the existence of appropriate plans and the absence of segregation.

The integrated territorial planning methodology of EU fund4 required that local governments include anti-segregation plans in their integrated local development plans, if there is a segregated neighborhood within their administrative borders. Additional social indicators were introduced to target concentrations of low-educated, unemployed people, and to identify segregation. Again, no specific ethnic indicators were included. Like with the preparation of the educational equality plans, equality experts were trained and commissioned by the Ministry of Social Affairs to help prepare the plans and to provide quality control—and the experts were again granted formal veto rights. Supervisors assisted equality experts and made decisions in the event of disputed issues. Local governments’ access to EU funds was conditional on the existence of appropriate plans.

Also in 2008, the most disadvantaged microregions’ program—which provided EU-financed support to prepare and implement integrated programs in 33 microregions, with a total population of 1 million—applied the following guarantees (as a condition to access to program funds, not as a legal requirement):

 For each microregion, an education equality expert and an urban development equality expert was commissioned by the National Development Agency; the two equality experts worked in pairs.

 These experts prepared an analysis of challenges experienced in the microregion, and drafted a set of recommendations to address these.

3 See Act CXXV. of 2003 65.§. on Equal Treatment. 4 These requirements are based in the “Urban Rehabilitation 2007-2013” Handbook published by the Ministry for Self-Governments and Territorial Development

16  Next, they assessed the microregion’s project package—that is, how it addressed territorial equality (categorizing packages into one of the following three categories: decreases inequalities, maintains inequalities, or increases inequalities) and social equality (categorizing packages into one of the following four categories: significant improvement in each of the three fields of education, employment, and housing; improvement in two fields; improvement in one field; or no improvement), and categorizing each project by how it relates to equality (categorizing projects into one of the following four categories: full solution to a challenge; partial solution; no solution; or increases inequalities). However, the equality experts had no formal veto right.

 A mainstream assessor also assessed the microregion’s project package—specifically, how it addresses economic development, territorial equality, and social equality, with a focus on Roma and children.

For two out of the 33 microregions, these assessments concluded that the project package would increase inequalities. These two project packages were sent back for revision. The assessments also identified smaller projects that were expected to increase inequalities. As a result of the review, these projects were replaced.

In 2009, legislative changes were introduced required municipalities to prepare LEPs5 although entry into force was delayed. According to the legislation, local governments must prepare LEPs every five years in order to promote equal opportunities for a set of target groups, including women, people in extreme poverty, Roma, people with disabilities, children, and the elderly. LEPs are expected to be harmonized with other strategies, including the educational equality plans and the integrated local development strategies’ anti-segregation plans. The legislation identifies the TKKI—an institution attached to the Ministry of Human Capacities and in charge of operationalizing the Ministry’s social inclusion agenda—as the organization responsible for rolling out the LEP framework, in particular by providing training and TA at the local level. The LEPs are prepared by local government staff who are trained and assisted by a network of mentors employed by TKKI. Local governments’ access to any national, EU, or other development funds is conditional on having appropriate LEPs. For that, local governments need to fulfill LEPs’ minimum content requirements, which include a situational analysis chapter for each target group that features an analysis of the range of available benefits and opportunities for accessing public services, public transport, information, and participation in community life. For each target group, the chapter must identify specific social problems and corresponding solutions. The

5 After the change in government in 2010, enforcement of the aforementioned legislative changes was postponed, followed by further legislative changes. Although LEPs are still required, their quality control requirements have been considerably softened. LEPs are regulated by law CXXV/2003 on equal treatment and the promotion of equal opportunities (Article 31), government regulation 321/2011 on rules of preparing LEPs and on mentors, and MHC ministerial regulation 2/2012 (5 Jun) on detailed rules of preparing LEPs.

17 LEP ends with an overview table that shows the planned development opportunities and measures. Local governments must revise their LEPs every two years.

Beginning in 2012, the LEPs’ development phase was connected to the development of an online interface that is hosted by TKKI and serves as a database for the municipalities’ texts, activities, and contact details. The mentors delegated by TKKI can access the municipalities’ data, and all municipalities’ responsible staff can upload data and browse “good practices.”6 The database was designed to serve two purposes: to serve as a resource for municipalities, and to provide a platform for M&E. For example, TKKI used it as a tool to evaluate the LEPs in 2015, which consisted of reviewing 500 LEP texts in detail. However, the current interface does not yet serve as a full monitoring tool, as there are no features that would enable municipalities to upload information on progress and compile it into a searchable database.

Despite the fact that M&E is critical for tracking results on social inclusion both at the local and national levels, Hungarian legislation on equal opportunity does not address this area within the LEPs. National-level policy makers who measure social inclusion at the subregional level need to take into consideration how social inclusion measures target (that is, how they identify a country’s lagging areas that should receive attention when developing interventions) and monitor (that is, how they determine what data should be regularly collected to identify whether the gap is closing between the most disadvantaged and the general population). The two reports—Hungary: Measuring Inclusive Growth for Enhanced Development Impact: Targeting and Monitoring of EU Co-funded Social Inclusion Activities at the Subregional Level and the Handbook for the Implementation of Local Equal Opportunity Plans in Hungary—address the issues of targeting, monitoring, and evaluation in more detail.

6 The database contains very few “good practice” examples.

18 4 The institutions behind the framework

This section reviews the actors, roles, and responsibilities associated with coordinating, planning, and implementing the local equality framework at the national level. It is followed by an institutional gap analysis of key challenges that small, medium, and large municipalities face during the planning and implementation stages of the LEP cycle.

4.1 Actors, roles, and responsibilities at the national level

Social inclusion policies are coordinated across various ministries in Hungary. The Ministry of Human Capacities has the broadest mandate among all institutions, including education, health care, and social inclusion. The Ministry for National Economy (MfNE) coordinates employment policies, whereas the Ministry of Interior (MoI) coordinates Hungary’s (sizeable) public works program. The national level has extensive responsibilities for operating schools and healthcare institutions; these are executed by the Ministry of Human Capacities’ background institutions, such as Klebelsberg Institutional Management Center (KLIK).7

A specific Hungarian institution is the Minority Self-Government system for all national and ethnic minorities, including Roma. Minority Self-Governments have been established by legislation and are financed by the state. Minority Self-Government elections are held every four years, in conjunction with local government elections. While all other Minority Self- Government core activities are related to cultural activities, the National Roma Self- Government is also involved in social inclusion efforts, based on a high-level agreement between the government and the National Roma Self-Government at the political and policy level; this includes the implementation of several large EU-funded projects. The roles and responsibilities of the various actors at the national level are summarized in Table 1.

Table 1. Actors, roles, and responsibilities at the national level

Actor Roles and responsibilities

Ministries

- Ministry of Human Capacities - Sector policies for education, health care, social (MHC) inclusion

- Managing authority for Human Resources Development OP (EFOP)

- Ministry for National Economy - Sector policies for employment (NGM) - Managing authority for Economic Development and Innovation OP (GINOP) and Territorial OP (TOP)

7 Klebelsberg Intézményfenntartó Központ

19 - Ministry of Interior (BM) - Coordinate the public works program

Background institutions

- Klebelsberg Institution - Manage schools Management Center (KLIK) - Implement EU-funded programs

- National Health Care Service - Manage healthcare institutions Centre (ÁEEK) - Implement EU-funded programs

- Türr István Training and - Participate in the implementation of the framework Research Institute (TKKI) agreement between the government and the National Roma Self-Government

- Implementation of large-scale EU-funded adult training programs

Other governmental organizations

- Central Statistical Office (KSH) - Statistics

- Lechner Lajos Knowledge - Operating TEIR (regional development and spatial Center (LLTK) planning information system)

Roma Self-Government

- National Roma Self- - Co–decision making regarding the implementation of Government (ORÖ) the framework agreement between the government and the National Roma Self-Government

- Implement large-scale EU-funded programs

4.2 Actors, roles, and responsibilities at the district and county levels

Hungary has 19 counties, plus Budapest. In 2013 the government established 174 districts, each of which has a district office (plus 23 district offices in Budapest). Roles and responsibilities of the county and district level are summarized in Table 2.

Table 2. Actors, roles, and responsibilities at county and district levels

Actor Roles and responsibilities

Counties

20 - County government offices - Conduct compliance check of kindergartens and schools

- County labor centers - Match labor supply and demand at the county level

Districts

- District offices (under - Administer unemployment and social benefits (for government offices) people with disabilities and for child care)8

- Leaders of school districts - Supervise schools (under KLIK)

- District labor offices (under - Match labor supply and demand at the district level county labor centers)

4.3 Actors, roles, and responsibilities at the local level

Hungary has 3,155 towns and villages, each of which has a local government (plus 23 districts in Budapest, each of which has a local government). The local level has limited responsibilities regarding education and health care. In contrast, it has extensive responsibility for organizing public works and, due to a very recent reorganization, administering various social benefits (other than those administered by district offices—see Table 3). Minority Self-Governments have local-level organizations as well (where a minority is significant). Like at the national level, local Roma Self-Governments are often involved in social inclusion efforts. The roles and responsibilities of the local level are summarized in Table 3.

Table 3. Actors, roles, and responsibilities at the local level

Actor Roles and responsibilities

8 Reorganized as of March 2015; see http://www.kormany.hu/download/e/49/30000/T%C3%A1j%C3%A9koztat%C3%B3%20alapszolg%C3%A1ltat% C3%A1st%20ny%C3%BAjt%C3%B3k%20r%C3%A9sz%C3%A9re%20a%20szoci%C3%A1lis%20ell%C3%A1t%C3%A 1sok%20v%C3%A1ltoz%C3%A1sair%C3%B3l.pdf.

21 - Local governments - Organize primary healthcare services

- Operate crèches and kindergartens

- Organize public works activities

- Administer social benefits other than those administered by the district offices (for housing, debt management, health care)9

- Implement projects (such as Sure Start Children’s Houses)

- Prepare and implement LEPs

-Local Roma Self-Governments - Organize cultural events

- Cooperate with the local government regarding Roma’s social inclusion

4.4 Key bottlenecks for effectively planning LEPs

The development of local strategic documents has become a core local responsibility over the last few years. Many municipalities have prepared sectoral policy strategies, such as equality plans in public education, local service delivery plans, integrated urban or settlement development strategies, and various related implementation plans. Two common features of all these plans are that they had to be produced mostly on the basis of intersectoral cooperation; and are linked with or are conditional for receiving funding. Thus, there has been a critical financial incentive to develop these strategies and plans: additional resources were made accessible based on the plans’ objectives and interventions. In other cases, central normative funding was obtained for service delivery that has been (re)designed based on such documents.

The state has offered a set of quality control tools to support local governments in planning processes. This support typically comes in the form of TA through mentors, as in the case of planning for developments in disadvantaged microregions, planning urban rehabilitation in cities with county rights, and, in the case of education, equality plans. In the case of urban development funding, external experts also assessed the plans. If they surpassed a certain score threshold (that is, if they were of good quality), the municipalities could get funding for a range of activities from the urban rehabilitation funding axis under the Regional OP.

9 Reorganized as of March 2015; see http://www.kormany.hu/download/e/49/30000/T%C3%A1j%C3%A9koztat%C3%B3%20alapszolg%C3%A1ltat% C3%A1st%20ny%C3%BAjt%C3%B3k%20r%C3%A9sz%C3%A9re%20a%20szoci%C3%A1lis%20ell%C3%A1t%C3%A 1sok%20v%C3%A1ltoz%C3%A1sair%C3%B3l.pdf.

22 Despite these incentives and links to (EU) funding, most of the plans—particularly the LEPs— remained “paper tigers” rather than real strategic planning and implementation tools. Even though most LEPs are comprehensive—even the smallest municipalities produce 50–60 pages of material—the analysis of the equality challenges inside the community is largely superficial. The formulated objectives are often disconnected from communities’ needs and realities, and community outreach and consultations are of varying quality—there are no budgets attached to the plans and the actual equal opportunity interventions (that is, the investments that are taking place) are not linked to or aligned with LEP objectives. Moreover, the LEPs are often not sufficiently horizontally or vertically integrated, and do not adequately establish synergies with other plans (such as the educational equality plans). With regard to implementation, one of the major challenges of the LEP process is the fact that the local level has to plan for interventions for which it lacks the mandate, competency, budget, and resources to implement.

A further key shortcoming of the LEPs is that based on the framework for LEP design—which was established under Ministerial decree10—these plans are static in nature, and do not account for demographic trends and fluctuations or institutional and legal changes. However, it is the demographic trends that determine the local population’s composition and thus the evolution of equal opportunity and exclusion challenges. For example, phenomena that determine the priorities, needs, and resources within a locality over the course of five years include young people‘s migration and temporary or permanent employment abroad; people moving to escape poverty and seek a better life; changes to a population’s health status as the result of certain interventions, and so on. Institutional and legal changes will affect the opportunities of relevant groups (such as redesigning the school system and training programs; changing the rehabilitation system for the disabled). When analyzing the situation and planning interventions for equal opportunity, local policy makers must keep in mind expected future developments. If, for example, the number of young people is constantly decreasing, the demands for child-related benefits and services will decrease as well—but at the same time, if the latter are no longer present, the municipality will become less attractive to young people (who will one day become parents), and they will likely end up migrating. Thus, these situations must be examined in their complexity, along with their impacts on local governments’ medium- and long-term agendas.

In summary, there are at least three key challenges commonly encountered during the LEP planning phase: (i) LEPs are not adequately horizontally and vertically integrated with other relevant elements of Hungary’s equality-oriented development policy; (ii) LEPs are not sufficiently linked to the community’s real needs and realities; and (ii) LEPs list interventions for which the local level has neither the mandate nor the budget to implement. These challenges appear with varying intensity at the local level, depending on municipalities’ size and capacity (see Table 4).

10 2/2012. (VI. 5.) MHC Decree on the Detailed Rules of Producing Local Equality Plans.

23 Table 4. Municipalities’ challenges during the LEP planning process

Capacity Small municipalities* Medium Large considerations municipalities** municipalities*** during the LEP planning process

Planning/analytical  Situational Difficulties with the Varying degrees of capacity analysis stays at a adequate vertical community superficial level and horizontal outreach and  Objectives are integration of LEPs involvement during often the planning phase disconnected from communities’ needs and realities  Plans are disconnected from social inclusion activities under implementation Service delivery  Gaps in or no District centers Service delivery capacity relevant service cover most of the capacity serves the (education, delivery at the service delivery population well employment, local level capacity beyond the  Lack of capacity to health, social) administrative coordinate access to available borders; lack of services in nearby coordination with larger smaller nearby municipalities municipalities to help their citizens access services

Ability to adapt  Less financial District centers Strong ability to to/benefit from burden, but lack have taken over adapt and strong recent institutional of tools and social, health, foundation for changes in the resources to education, and in planning service relevant sectors design local part employment delivery and (education, responses service delivery, development employment, which means more  health, social) Only local public control, resources, works schemes and ability to adapt

24 represent “local autonomy” in decision

* Municipalities with less than 5,000 inhabitants: 2,880 municipalities covering approximately 3.1 million residents. ** Municipalities with between inhabitants 5,000 and 40,000: 255 municipalities covering approximately 3.2 million inhabitants. *** Municipalities with a population above 40,000: 42 municipalities covering approximately 3.4 million inhabitants.

In order to address these challenges, the following issues should be reviewed and revised:

 the design of the LEP planning method;

 the institutional arrangements of the LEPs; and

 the state’s expectations regarding how effective a local-level strategic plan is in the current administrative and financial context.

4.5 Key bottlenecks for effectively implementing LEPs

The LEPs’ main objective is that they should serve as a sort of “equality control tool” for the local level with regard to policy design and resource allocation. One of the key strengths of the LEPs lies in the fact that they are designed as a conditionality for receiving EU funds; municipalities are only eligible to receive funding from the Human Resources Development Operational Program (EFOP) if they have produced an LEP. In the current development policy context, however, there are four major constraints to this conditionality:

1. development strategies and funding are planned at the county level and for cities with county rights;

2. the largest share of the relevant service is delegated to and delivered at the district level as a result of the public administration reform, hence also development of these services are the responsibility of the district level;

3. equality-based development policy is largely constrained to urban development (this is currently the only realm where the strategy incorporates equality as a basic guiding principle);

4. out of the major social inclusion tools, the local level has retained its relevance basically only with regards to public works schemes.

Local governments can therefore plan to absorb the limited normative funding that they receive from the central state budget for a very small set of services for which they are expected to plan projects that are linked to the 2014–2020 Operational Programs (OPs)

25 (however, these were not open for bidding as of Fall 2015).11 In consultations with local stakeholders it became apparent that this leads local governments to prioritize and finance social inclusion interventions using a “project logic,”—that is, developing activities that respond to the one-dimensional funding windows available to them. However, the most pressing social inclusion challenges are typically complex and require long-term commitment, interventions, and financing, which cannot be addressed through ad hoc and piecemeal initiatives. Moreover, changes in central funds may void calculations performed at a local level, and funding sources will become even more limited. Moreover, municipalities with particularly low or limited administrative capacity and financial resources but very complex social inclusion challenges find it very difficult to operationalize their LEPs and develop complex and multipronged interventions. They express a strong need for hands-on TA and support. However, while considerable support (in the form of regional mentors) was provided to plan the LEPs, only a small cohort of regional consultants is available for the implementation phase.12 This means that the regional consultants do not have sufficient time to provide the type of hands-on support that most municipalities will require during the implementation phase.

Table 5. Municipalities’ challenges during the LEP implementation process

Low-capacity Average-capacity High-capacity municipalities* municipalities** municipalities***

Implementation Lack of capacity to Limited capacity; High level of capacity and capacity at the local implement activities that interventions often human resources, level adequately respond to the reflect available including in the form of community’s needs funding rather than social workers to local needs (“project implement complex logic”) interventions

Role of external Much needed but can Helpful and can better Limited need; role of facilitators (e.g., TKKI only help uncover coordinate activities facilitators mostly related mentors) unaddressed needs and and available resources to ensuring that LEPs and gaps in implementation their objectives are kept as due to lack of resources guiding principles and that municipalities do not shy away from real, pressing problems

Ability to access Only local public works Appropriate ability to Sufficient access, but the sufficient funding schemes get fully funded, gather resources scale of the problem may other resources are be very large and need “windfall gains” e.g., from long-term and complex

11 A recent (though not yet published) review of LEPs indicates that, in order to address identified problems at the local level, municipalities prefer to include measures implemented from an EU co-financed project, rather than from their own resources. 12 The number of “regional mentors” was reduced from 125 during the planning phase to 25 for implementation.

26 EU funds funding opportunities

* Municipalities with less than 5,000 inhabitants: 2,880 municipalities covering approximately 3.1 million residents. ** Municipalities with between 5,000 and 40,000 inhabitants: 255 municipalities covering approximately 3.2 million inhabitants. *** Municipalities with a population above 40,000: 42 municipalities covering approximately 3.4 million inhabitants.

In addition, there are a number of social challenges that appear on larger territorial levels, and tackling them could have ripple effects beyond the municipality’s administrative borders. Certain local developments can have a counterproductive effect, if locals in need do not benefit from them. It is important for local governments to anticipate these unexpected effects. Within the framework of investment projects, programs and jobs should be created for low-skilled, long-term unemployed and their families, in addition to attracting skilled workforces from other municipalities. Thus, managing socioeconomic problems and resulting political and social tensions are not just a local responsibility, though their resolution requires local leadership.

Taking into account the current institutional context of the equality-based interventions, it is apparent from the challenges summarized in Tables 4 and 5 that the local level’s ability to implement social development goals remains considerably constrained in low-capacity municipalities. The three key bottlenecks are:

o Capacity bottleneck: There is insufficient capacity to adequately analyze, plan, and implement relevant and complex social inclusion interventions. The TA (mentoring and external monitoring) provided by TKKI offers only limited help because it focuses more on the production of the plan than on implementation.

o Community engagement bottleneck: The planned and implemented activities are not sufficiently connected to communities’ local realities and real needs; this is due to a lack of consultation and community engagement. Interactions with CSOs and communities are often limited to periodic consultations rather than ongoing interactions throughout an LEP’s planning and implementation. The engagement bottleneck is also often linked to political sensitivities with regard to addressing complex and contentious social inclusion issues.

o Financing bottleneck: Particularly small municipalities have very limited off-the- top funding available from the central government, and thus are only able to finance a very limited set of services and social inclusion activities. Some get financed through externally (EU-) financed self-standing projects, which do not adequately respond to complex and multidimensional social inclusion challenges. The funding bottleneck also creates sustainability concerns, as activities end once the project closes.

In the following sections these three bottlenecks will serve as a lens through which to review how social inclusion approaches have been developed and implemented inside and outside

27 Hungary; what role these three bottlenecks have played in that context; and whether and how they have been addressed.

28 5 Learning from experiences, part I: Local social inclusion frameworks in the Czech Republic, Poland, and Slovakia

The development of effective, efficient, and inclusive approaches for addressing the social inclusion and equal opportunities agenda has been a priority for most European countries, including in the context of the Europe 2020 agenda.13 Central and Eastern European countries face similar challenges in this regard, which are often rooted in the joint transition experience. This section focuses on experiences with addressing complex social inclusion challenges at the local level in the Czech Republic, Poland, and Slovakia. The case studies highlight not only what worked well, but also what created challenges, led to inefficiencies, or even caused complete failure. The case studies aim to provide insights into effective elements of the programs and identify the most important bottlenecks and shortcomings the three countries encountered. In doing so, the experiences offer lessons for refining Hungary’s approach to planning and implementing equal opportunity plans.

5.1 Poland’s Social Inclusion Program (part of the Poland Post-Accession Rural Support Project—PARSP)14

5.1.1 Context The emergence of structural poverty and unemployment were the two largest interrelated negative side effects of Poland’s transition to a market economy, and contributed to a self- perpetuating cycle of social exclusion, especially in rural and underdeveloped local districts (gminas). Additional factors, such as deficiencies in human capital and social skills, as well as physical disability and substance abuse (and the stigma associated with these) further worsened marginalization in those communities. The intergenerational perpetuation of poverty and long-term unemployment made it evident that it was not enough for Poland to achieve high economic growth in its struggle against social exclusion. Active policies to encourage inclusion at the local level were needed. The most underdeveloped gminas struggled with a sense of isolation and the population’s overall despondency and passivity. This in turn led to very low participation in the uptake of existing social services and few incentives to create more relevant and demand-driven services.

5.1.2 Approach Poland’s Social Inclusion Program (SIP), part of the World Bank–funded PARSP, was implemented from 2006–2011 to comprehensively and innovatively address social exclusion in the country’s 500 most marginalized rural gminas. The program’s main objective was to increase citizen participation and enhance the capabilities of local authorities to identify and plan their social inclusion strategy. The program also aimed to make better use of local economic and cultural resources, engage citizens in decision making on budget and services

13 The Europe 2020 agenda is Europe’s growth agenda, setting EU-wide objectives for employment, innovation, education, social inclusion, and climate/energy to be reached by 2020. Member states have adopted their own national targets in each of these areas. Concrete actions at EU and national levels underpin the strategy. 14 See also World Bank (2009); World Bank (2012a); and World Bank (2012b).

29 provided by gminas, and introduce a larger variety of social services by creating NGOs and strengthening informal groups, day care centers, social clubs, and so on. The program delivered assistance to rural communities and vulnerable groups, especially youth, single mothers, the elderly, and the disabled to directly tackle their isolation.

SIP was managed through a central project implementation unit that was attached to Poland’s Ministry of Labor and Social Policy, and by a network of regional consultants who directly interacted with the beneficiary gminas. The activities were organized in two phases, starting with community mobilization and awareness raising, as well as capacity building. The key to the capacity building component was a network of 27 highly trained and motivated regional consultants and facilitators who worked with these communities to identify their social exclusion challenges and resource gaps. The consultants built teams of local stakeholders to work on strategies for solving social problems and organized highly interactive community outreach meetings and discussions, bringing together the residents, policy makers, service providers, and other relevant stakeholders.

After the scoping, mobilization, and planning phase was completed, local stakeholder groups started to develop and implement a number of select social services using small-scale grants to test their capacity and the mechanisms of financial flows. Services were adapted to the needs the local communities had identified—in some communities these activities promoted the inclusion of the disabled, while in others they focused on the inclusion of children and youth or alcoholics. By the time SIP ended, 40 percent of the excluded Inclusion of Disabled Youth in Byszow population groups in the beneficiary In the village of Byszow, local businessman and runner gminas accessed at least one social Marek Bargiel started to organize competitions for the inclusion service, compared to 11.3 disabled after noticing their interest in his running. Now, percent at the start of program disabled youth run races and train together. They have activities. In addition to the increased traveled to Warsaw and Krakow for races and have also visited museums and theaters. Instead of staying home uptake in social services, the program out of sight, they have become part of village life, and in increased the visibility of previously doing so, have changed people’ perceptions. ”It is excluded groups such as single mothers surprising how self-sufficient the disabled children can be,” says Bargiel. “They don’t need much assistance and or the disabled, and managed to they get around very well on their own. This project has actively integrate them into community made them believe in themselves, but it also has made life. One of SIP’s most impressive results me believe I can do something good.” SIP provided is the rise in local formal and informal financial support to local initiatives in Byszow, including the disabled inclusion scheme. groups and associations in beneficiary gminas. In the 500 participating gminas, Source: Project Brief. over 800 NGOs were created and formally registered, and over 1,000 informal groups were formed.

30 5.1.3 Lessons learned Capacity bottleneck: The role of external actors. SIP proved that external actors can prove the needed “spark” to motivate and empower local actors without compromising ownership and sustainability—one of the key criticisms this model encounters. In the case of SIP, the 27 regional consultants proved to be an essential part of the program’s success. The highly trained, competent, and committed consultants offered a fresh perspective; they motivated and empowered local actors and stakeholders to develop hands-on solutions to deeply ingrained exclusion challenges. For the first time, citizens were encouraged to participate in activity planning, and to think creatively while doing so. Key to their success was the fact that the regional consultants worked with “their” communities throughout the full project cycle—that is, providing capacity-building support not only during planning but also for activities’ implementation phases.

Community engagement bottleneck: The role of community mobilization and participation. SIP’s strong focus on community mobilization and participation strengthened the level of community self-organization and the presence of civic structures at the local level. Beneficiaries reported that project activities have helped them overcome their hesitation to become involved in nonprofit organizations and increased their awareness and appreciation of the role of social service providers. Many stereotypes were challenged throughout the SIP process, for example, that social services need to be provided by public institutions. The project encouraged gminas to rely on private providers and community- driven organizations. Throughout the process, the gminas discovered that locally based private providers such as NGOs can offer an attractive alternative to public institutions.

5.2 The Czech Republic—The Agency for Social Inclusion15

5.2.1 Context In order to respond to emerging new social risks and threats of poverty, labor market marginalization, long-term unemployment, and social exclusion, the Czech Republic developed a National Action Plan on Social Inclusion (NAPSI) for the 2004–2006 period, with the explicit requirement to mobilize local actors and resources to address social exclusion. In addition, in 2006, the Czech Ministry of Labor and Social Affairs mapped the situation in hundreds of municipalities and identified more than 300 localities as “socially excluded.” Socially excluded localities were broadly defined as territories in which groups that face multiple and cumulative disadvantages reside. These included territories that experience long-term unemployment or unemployability; populations with low or lower-than-average qualifications; high dependence on social benefits or illegal employment; and high incidences of substandard housing. These territories also experience social tensions, civil unrest, violent crime, visible prostitution and drug distribution, and constant negative media attention. In the majority of the socially excluded localities, the exclusion had a distinct ethnic (that is, Roma) dimension.

15 See also Sirovátka and Rákoczyová (2007); Agency for Social Inclusion (2012).

31 5.2.2 Approach In response to these challenges, the Agency for Social Inclusion (ASI) was established in 2008 as the Czech government’s main tool for tackling inclusion in these territories. The agency was established as a coordinating body that facilitates the implementation of the government’s poverty reduction and social inclusion strategies (that is, Roma inclusion strategies) at the local level. Its mission is to help a select number of municipalities (currently 33) establish an effective process of social integration through a partnership approach to effectively connect the national government with local governments, nongovernmental stakeholders, and service providers. The agency’s objective is to support municipalities in developing approaches to interact with and integrate their segregated communities.

The agency consists of a central unit that is in charge of gathering expertise and knowledge, fundraising, and coordinating with relevant national governmental bodies; and establishing a network of carefully selected, experienced, and well-trained local consultants (0.5 per municipality) who support municipalities in developing and implementing social inclusion measures in an integrated manner. A fundamental pillar of the agency’s work is the development of the so-called Local Partnership. The Local Partnership essentially consists of a communication platform that brings together all relevant stakeholders, including schools, employers, police, any relevant local service providers, and community representatives with the objective of jointly developing and implementing social inclusion solutions. Particular attention is paid to identifying ways in which existing initiatives and services can be better linked and how various local actors can better cooperate to establish a joint or integrated method for addressing local needs and challenges. The agency is represented by a local consultant who coordinates the Local Partnership’s activities, and it operates in the municipalities for a total of three years. The first year’s focus is on researching and analyzing the particular challenges faced by the municipality, establishing the “Local Partnerships Platform,” and developing a local strategy that includes advice regarding accessing financial sources with which to implement the strategy (with a strong focus on EU funding). During the second year, activities focus on capacity building for project management, as well as social and legal guidance to nongovernmental and nonprofit organizations. In the third year, the focus continues to be on project management, with special attention paid to developing effective M&E mechanisms. After the three-year period, the coordination of the Local Partnership is handed to a municipal representative, (that is, one of the members of the partnership).

5.2.3 Lessons learned Capacity and financing bottleneck: Enabling a paradigm shift toward addressing social exclusion. The agency’s most noteworthy contribution has been to bring about a paradigm shift in the way social exclusion, segregation, and marginalization challenges are addressed in Czech beneficiary municipalities. This shift manifested itself in several ways:

32  Political attention is paid to social exclusion, including regarding the necessity to invest in “soft measures” rather than only in investment projects. Moreover, municipalities note that the agency has increased their ability to raise funding for non–infrastructure investment activities.

 Most beneficiary municipalities have moved away from planning and financing isolated and uncoordinated activities and are developing comprehensive and well-integrated strategies.

 There is now a focus on sustainable impacts rather than “quick wins.” The agency’s work has sensitized stakeholders at all levels (national, regional, local) toward the necessity to invest in long-term approaches, which will take time before they generate tangible and lasting results.

 Social integration is viewed as a shared responsibility for all stakeholders. Social inclusion plans formulate clear roles, responsibilities, and commitments for each stakeholder who is part of the Local Partnership platform, including the Roma communities.

Community engagement bottleneck: The need for communication platforms at the local level. The way the agency established a formal platform for communication and interaction of all relevant local-level stakeholders has proven to be the condition sine qua non for the successful planning and implementation of social inclusion activities in the Czech Republic. The Local Partnership is based on a commitment by all parties to work together and “own” the process, rather than waiting for the social inclusion process to just “happen.” The frequent, ongoing interactions allow much needed trust to be built. They also help to overcome stereotypes and preconceived conceptions; address community tensions and sensitivities; and facilitate the development of constructive and pragmatic solutions.

Capacity bottleneck: Developing lasting local capacity rather than substituting for it. Contributing to the success of the agency’s work is its mandate as an initiator of a system change, rather than a body that provides or substitutes for lacking capacity and/or services at the local level. This conception—in conjunction with sufficient financial resources, competent local consultants, and a clear exit strategy after the completion of the three-year cycle—ensures that the agency can truly empower municipalities.

Capacity bottleneck: Credibility matters. A key challenge that has arisen in the context of the agency’s work is the conflict between (overly) high (public) expectations of it and the role it will play in bringing about change, while the real competencies of the agency vis-à-vis the municipalities have been low.16 A survey among local actors in target municipalities regarding positive change for socially excluded localities linked to the work of the agency therefore paints a mixed picture: 30.5 percent of local actors responded “definitely yes;” 21.1 percent “rather yes;” 24.2 percent “neither yes nor no;” 8.6 percent “rather no;” and

16 Zpráva, 2011

33 15.6 percent “definitely no”.17 Recent disputes between the agency’s overseeing minister and its staff about a possible restructuring, the use of EU funds, and monitoring the money’s effect on Roma integration have further undermined the agency’s credibility.

5.3 Slovakia’s Comprehensive Approach18

5.3.1 Context Slovakia is one of the five new EU member states with the largest Roma populations. Roma account for between 2 and 8 percent of the total population. Significant gaps in living conditions persist between Slovakia’s Roma and non-Roma. The country’s efforts to address the challenges faced by marginalized Roma communities—including the appointment of a Plenipotentiary of the Slovak Government for Roma Communities—have suffered from fragmentation, lack of institutional capacity, and limited communication between governmental levels. These challenges have led to a failure to effectively target and reach the most marginalized communities through EU-funded activities during Slovakia’s first shortened 2004–2006 programming period after the country’s accession to the EU. To address this challenge, marginalized Roma communities represented one of the four so- called horizontal priorities of Slovakia’s National Strategic Reference Framework, the key document for accessing the EU’s structural funds in the 2007–2013 programming period. The objective of the horizontal priority was to improve living conditions, raise education levels, and increase employment for members of marginalized Roma communities.

5.3.2 Approach The objective of the Comprehensive Approach was to support the targeting of structural funds to Roma communities under the marginalized communities horizontal priority of Slovakia’s National Strategic Reference Framework by actively involving the Office of the Plenipotentiary of the Government for Roma Communities (OPGRC). The Comprehensive Approach was built around three pillars: (i) developing Local Strategies of Comprehensive Approach (LSCA) that involve all relevant stakeholders and are promoted by the regional offices of the OPGRC and external facilitators; (ii) publishing a compendium of model projects and good practices with the potential for future replication; and (iii) mainstreaming the Comprehensive Approach model into all strategic documents of the 2007–2013 programming period. Among other results, 14 LSCAs at the microregional level were developed,19 including a tailored project pipeline for each microregion. To ensure an integrated approach, there was a condition in place that all LSCAs had to include at least five projects focusing on at least two of the mandatory areas of development (housing, employment, education, and health) and at least one optional area of development (such as community development, culture, environment). The activities and interventions were required to be sequenced logically, where soft training interventions were combined with

17 Tomáš, 2011: Promoting Social Inclusion of Roma: A Study of National Policies 18 See Slovak Governance Institute (2013) 19 The 14 microregional LSCAs encompassed a total of 114 municipalities.

34 infrastructure investments, so that staff would be trained in time for the facility to become operational. According to the approach’s design, the OPGRC was responsible for providing municipalities and microregions with TA to develop high-quality LSCAs; providing TA for successful LSCAs and project implementation; and for monitoring and evaluating the Comprehensive Approach. To ensure effective coordination with the EU-financed OPs, managing authorities were expected to launch targeted calls for project proposals covered by the LSCAs. Overall, while the Comprehensive Approach was well designed and thoughtful, the reality of the implementation looked very different. The lessons below offer some insights on what went wrong, and why.

5.3.3 Lessons learned Capacity and financing bottleneck: The need for continuity and long-term political commitment. Personal and policy discontinuity at the OPGRC resulted in serious disruptions during the Comprehensive Approach’s early phases. As a consequence, the approach was no longer being implemented according to its original design. At the same time, no guidance was offered regarding how to deal with the disruptions, nor were clear modifications developed and/or communicated. The various stakeholders involved in implementation tried to fill this vacuum by attempting to impose their own (often conflicting) preferences and modify the approach according to their own agenda, which made implementation increasingly difficult.

Capacity bottleneck: Appropriate TA is necessary through all stages of the project cycle. Even though the intention had been to provide adequate TA to the local level, the lack of appropriate TA during rollout was a main cause of failure. This was particularly the case during the planning phase of local strategies, which led to the development (and approval) of low-quality LSCAs. There were several reasons for the limited TA support during the LSCA elaboration and planning stage. Political and personal discontinuity due to elections and government changes diluted the ownership over and commitment to the Comprehensive Approach. The limited number and expert capacity of staff resulted in the majority of TA staff focusing on developing managing documents and other administrative tasks rather than providing hands-on TA to municipalities.

Financing bottleneck: To ensure adequate funding, local strategies and EU OPs need to be compatible. Funding opportunities under the OPs for local strategies developed under the Comprehensive Approach were insufficient due to quality and compatibility problems between OPs and local strategies. The OPs for EU-financed social inclusion activities were designed before the Comprehensive Approach was introduced. No formal mechanisms for soliciting project proposals that had been developed as part of the Comprehensive Approach were established, which meant that all projects competed with project proposals from other municipalities. The often-insufficient quality of project proposals was an additional challenge. As a consequence, when project proposals were submitted to the respective

35 managing authorities, they were routinely not approved due to the low quality of project design or the ineligibility of the activities for support under the OP in question.

36 6 Learning from experiences part II: Delivering equal opportunity activities at the local level in Hungary

Exchanging experiences and learning from good practices is one of the most effective ways to bring local stakeholders together and strengthen capacity. To do so, good practices not only need to be centrally collected, continuously updated, and made publicly available—they will also need to reflect a commonly shared set of criteria that help establish what a good practice consists of, and why. These criteria, which should be aligned with the objectives of the Equality of Opportunity framework, would provide the analytical underpinning for developing a relevant stock of knowledge and classifying the case studies according to their strengths and weaknesses. Applying a common set of criteria to assess good practices has several key benefits:

 The criteria will help to quickly and easily filter out program activities that cannot clearly qualify as good practices, and highlight those where it might be worth exploring to allocate additional resources.

 They will inform the development and adaptation of relevant national strategies and national strategic reference frameworks and support effective funding decisions— including for EU funding—and inform the formulation and evaluation of relevant proposals.

 Local-level actors will be encouraged to systematically collect relevant data on those criteria that should contribute to strengthened attention and capacity for continuous M&E at the local level.

 Finally, sharing good practices is an important communication and outreach instrument. It can facilitate exchange and interaction between governmental and nongovernmental stakeholders at all levels and contribute to a shared understanding of what constitutes relevant social inclusion practices at the local level in Hungary.

Based on these considerations, the following section aims to achieve two objectives. First, it formulates a set of criteria for the collection and presentation of good practices at the local level. Second, it presents key findings and lessons from the social inclusion case studies that were prepared for this report.

6.1 What makes a practice “good”?

The following criteria should be used as the main organizing tool to assess and present social inclusion practices at the local level.20 The criteria will be applied in two tiers, starting with a set of indispensable criteria to consider any practice “good,” and then introducing additional considerations that will help further categorize practices according to their relevance.

20 This chapter draws on findings and key messages from a white paper titled “A Proposed Sytsem of Criteria for Good Practices” authored by György Molnár (Institute of Economics, Hungarian Academy of Sciences).

37 Finally, it needs to be noted that due to the varying degrees to which information—including objective and measurable data—will be available, this assessment exercise will have clear limitations in terms of being able to compare outcomes and impact. The degree to which local activities can demonstrate they fulfill the criteria will vary. Still, using common criteria to identify good practices will very clearly uncover those activities where the absence of certain criteria are due to important shortcomings in the design and implementation phases.

First tier: General criteria

 Integration. The activity should be part of an integrated approach to achieve the local social inclusion objectives and contributes to implementing the LEP. In this context, an important consideration needs to be highlighted: Typically, local authorities implement their LEPs through various projects, funded by different sources, including EU funding. Often, one project’s end objective can be highly dependent on the implementation of other projects—which might or might not get funded or implemented as initially expected. The assessment would benefit from the identification of such linkages and their impact on project impact and sustainability.

 Relevance. The objective(s) of the given practice should be able to be clearly described, including the intended outcomes and how they contribute to achieving LEP objectives. While the outputs activities produce are relevant to explaining how objectives were achieved, they do not qualify as being relevant in and of themselves. The good practice assessment would need to establish how the output contributes toward the intended outcome.

 Demand driven and addresses the community’s priority needs. This criterion assesses to what extent the practice responds to the most pressing needs that were identified at community level, and prioritizes those needs over other activities. For instance, some interventions, while generally useful, can be considered of secondary importance in a given place and circumstance. For instance, reconstructing the main square of a village using European Regional Development Funds is a popular straightforward investment, and the case can be made that it will enhance community life. However, in municipalities where parts of the settlement lack proper access to basic infrastructure and services, this investment is unlikely to be prioritized by the community when it is consulted.

 Efficiency. The activity should be suitable for achieving the designated objectives, which cannot be attained by using fewer resources if another method was used. This consideration ensures that no blanket, one-size-fits-all approaches can be disguised as good practices. For example, while many active labor market policies can help increase employment levels, it is important to differentiate the needs of the various target groups (for example, people with high versus low levels of education or work experience).

38  Ownership. Even when an activity has progressed as planned, it is likely to fail if beneficiaries do not support it (or cease to do so), or if changes in the priorities of local authorities lead resources to be insufficiently allocated for future operation and maintenance of project outputs. Typical risks to ownership include: (i) discrepancies between initial expectations and the activity’s actual outputs; (ii) tensions between beneficiaries and non-beneficiaries; and (iii) changes in political leadership. Assessing ownership, including how the activity actively brokered ownership, is therefore a key element for ensuring an investment’s long-term sustainability. This criterion should not be mistaken for the need to have societal acceptance or consensus as the planning stage. For example, programs that spend resources improving the situation of the poorest or ethnic minorities such as the Roma typically garner very low overall acceptance at the project preparation stage. This should by no means lead to the exclusion of such activities, but rather highlight the need for targeted measures to adequately address potential or existing ownership issues.

 M&E framework. The activity should include disaggregated indicators to monitor results and impact. In the case of cost-intensive programs (such as public works programs) adequately defining indicators and measuring results and impact should be a priority. It is easier to measure and interpret results if the operation has a longer time frame, but this in itself is not evidence of a good practice. The activity should include a sound Management Information System (MIS) that enables the continuous collection of well-defined and relevant quantitative and qualitative data on project indicators.

 Sustainability. An activity’s impacts or results should not disappear with its completion or end of funding. A clear exit strategy should be in place so that funding and institutional arrangements for the operation and maintenance of project activities can continue beyond the project’s conclusion. Adequate financial resources, administrative capacity, and governance structures need to be in place so services and facilities can be managed by local actors and accessed by community members. Otherwise, local communities will become depend on the project (and often EU financing) and risk losing the gains achieved by the time the project ends. It is important to note that financial sustainability does not mean that maintaining the improvements cannot rely on continued subsidies, such as from national government programs or the local budget. However, these resources need to be earmarked or otherwise made available for an activity to qualify as sustainable.

Second tier: Criteria concerning resilience and replication potential

 Adaptability. It is very rare that an activity is fully implemented according to its initial design. It is therefore very important that the activity is adaptable. It should accommodate unforeseen circumstances and developments while not losing sight of its original objectives.

39  Repeatability. This criterion identifies practices that could be repeated in other communities/locations, or rolled out regionally or nationwide. This does not mean that any activity could or should be copied entirely; but rather, relevant elements should be identified that can be utilized elsewhere, provided they are sufficiently adapted to the local context and circumstances.

The case studies developed for this report have been selected because they showcase a diverse set of experiences and local-level capacity to design and implement LEPs. The objective of the exercise was to identify communities that encounter some of the most common and, at the same time, most challenging and complex issues municipalities face when designing and implementing social inclusion activities. As a result, these case studies do not reflect the criteria of selecting good practices elaborated in Section 6, “What makes a practice ‘good.’” The selected communities vary in size and level of capacity, including two county towns (Pécs and Békéscsaba), two small towns with fewer than 10,000 people (Ács and Jászfényszaru) and three villages in disadvantaged areas with high shares of ethnic minorities (Porcsalma, Gyulaj, and Alsómocsolád). The eight case studies were prepared by relying primarily on key informant interviews with local decision makers, locally active NGOs, and social service suppliers. Case study topics include:

 programs intended to address housing segregation (Pécs)

 implementation of a LEP that involved civil activists using local resources (Békéscsaba)

 complex development in a segregated settlement (Jászfényszaru)

 education integration (Ács)

 providing complex family-centered assistance (Alsómocsolád)

 early childhood development (Porcsalma)

 reducing deep poverty, Roma social integration, stabilizing the management of local government (Gyulaj)

 income generation in disadvantaged environments via a cucumber production scheme (small communities in Szabolcs-Szatmár-Bereg county)

40

The case studies are introduced in Annex I of this report. The key lessons from them are as follows:21

1. Capacity bottleneck

 Complex problems require complex interventions. Local governments recognize that poverty is more than lacking material resources: It also means having fewer social interactions, difficulty accessing various services, and experiencing deficiencies in self-sustenance and self-reliance. Additionally, poor households are also disadvantaged in terms of housing, education, and labor market access. This complexity requires complex interventions, both in the urban and rural environment.

 Long-term planning needs to precede project development. One of the most important lessons the case studies identify is that any substantive outcome related to equal opportunity can only be achieved in the longer term, with conscious planning and by harmonizing the available resources. Although there may be some levels of difference in terms of awareness by the local policy maker, longer-term planning is a common feature of all settlements. In each case, the activities are not projects conducted in isolation, but rather part of a process. A good example of strategic vision is Pécs, where the local government has been systematically planning and implementing the integration of housing for years in order to improve the life conditions of those who live in segregated communities. A similar level of strategic thinking is demonstrated in Gyulaj, where the local government handles various objectives (reducing deep poverty, improving Roma social inclusion, stabilizing the management of the local government) and developments as a single system both professionally and financially. In this system, all development projects must contribute to all goals with their own respective means. The microregion competence center set up by the Alsómocsolád local government—which designs and implements projects—is also a helpful tool for longer-term strategic planning. The activities of this center impact the microregion as a whole, and each project is designed and planned with the involvement of the settlements concerned and informed by the collective experiences of past projects implemented in the region.

 Interventions need to take into account the local political context. Programs aimed at housing and school integration are directly tied to the local communities’ and institutions’ willingness and readiness to change and adapt. A key issue is the extent to which local decision makers are committed to social integration, and to what

21 The case studies that were developed for this section largely rely on qualitative inputs due to a lack of available quantitative data on targets, outputs, and outcomes. For that reason, the case studies do not include, for example, a proper cost-benefit analysis or cost-benefit ratio that includes the project costs per beneficiary. This highlights the need to collect data and measure results more systematically. The report Hungary: Measuring Inclusive Growth for Enhanced Development Impact provides relevant guidance in that context.

41 extent they are willing to face potential conflicts. For example, the municipal leadership of Pécs has consistently described its investment in the segregated settlements as “social rehabilitation” in the city (including during elections). The integration practices embraced by Ács have been accepted by parents (the constituency) due to the conscious preparation of the institutional reforms and consistent behavior of municipal decision makers.

2. Community engagement bottleneck

 Effective programs are based on genuine local demand. Involving the local community and experts in the design process is a prerequisite of a successful implemented project. Project-based investments need to be preceded by a very careful and considerate planning phase, during which the local planner needs to take into account the need for continuity and long-term sustainability. Meticulous preparation of programs and a consideration of interconnected phases will ensure that a proposal works well during implementation. This requires sufficient capacity from local governments; moreover, the involvement of any external experts in this process must be limited to that of a facilitator. A good example of this is Porcsalma, where in the course of developing the concept for a local Biztos Kezdet (Sure Start) Children’s House, Autonómia Foundation provided assistance in facilitating multistakeholder meetings attended by educational professionals, district nurses, and family caretakers from the children’s welfare service. In addition, the mayor and the future staff of the house were also occasionally involved in the design phase.

3. Financing bottleneck

 Successful programs effectively use external and national financial resources. For a longer-term intervention, it is important to regularly take stock of all available external and internal resources. The experience of several settlements demonstrates that, in addition to the availability of national and EU funding, a program’s success critically depends on how well the available local government and NGO resources, as well as the municipality’s development concept (for instance, through public works activities) fit the project objectives. The Szabolcs-Szatmár-Bereg county settlements are a negative example in this respect, due to how the expansion of the public works program crowded out several families from a (growing) cucumber farming activity. An important finding was that investments that effectively decrease the local government’s expenditures in the long term (for example, by facilitating the use of public funds for related activities, or through value creation, such as in Gyulaj) should take priority. It is also important during the planning phase to identify a municipality’s own resources that can be used to implement an intervention, so it does not need to rely on external resources. The Békéscsaba municipality plans programs in the LEP that do not require external funding but rather build on the existing nongovernmental and local government capacities. In several programs, by

42 the end of the community planning processes, the members of the target group managed to implement such activities merely by mobilizing their own resources (in Jászfényszaru, Pécs).

43 In the spotlight: Social economy

In order to increase disadvantaged groups’ labor market participation, and to offer a path for transitioning public works clients to the primary labor market, the Government of Hungary has been exploring the employment potential of social economy interventions. Several strategic issues should be addressed over the long term in order to better align social economy interventions with social inclusion policies and programs, though, some examples are already demonstrating opportunities in social economy. LEPs can help identify local-level employment or skills gaps or social service capacity constraints that may be best served through social economy vehicles. Developing and leveraging social economy interventions could help address these issues in the current environment. To this end, this section offers inputs toward developing and implementing a framework that would support such interventions, and aims to leverage these interventions to address prominent social challenges at the local level.

The term “social economy” has been coined through many overlapping definitions, and so far without a consensus as to whether a single one can be broadly applied—particularly in the European context. Social economy players are defined as entities that offer goods and services, the demand for which is not adequately covered by the private or public sector (UNDP, 2011). These entities can also be viewed as “enterprises and organizations, in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity” (ILO, 2013, p. 1). The idea of social economy “seeks to capture both the social element as well as the economic element, inherent in those organizations which inhabit the space between the market and the state” (OECD, 2013, p. 16). Social economy organizations can also be defined as a set of private enterprises, formally organized, having decision autonomy and freedom of association, created to satisfy the needs of their members through the market, through the production of goods and the supply of services, insurances and financial services, where decision making and any distribution of profit or surplus among the members are not directly related to the capital or contribution fees of each member, each of them having the right to one vote (CIRIEC, 2008, p. 8).

A conceptual framework derived from these definitions could be established on the basis of a strong linkage between pursuing economic goals and addressing social issues and challenges. The European Commission (EC), however, goes one step further in defining social economy, with a more pronounced emphasis on the social objectives: “A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involve employees, consumers and stakeholders affected by its commercial

44 activities” (EC, 2011, p. 2). In other words, the primary objective of a European social economy enterprise is to deliver positive social impact in an economically sustainable manner. Given the Hungarian National Reform Program’s emphasis on facilitating social economy, this chapter henceforth uses the EC’s definition.

6.2 Global lessons from the social and solidarity economy

The increasing global interest in the social and solidarity economy is driven by the search for labor market recovery opportunities in the countries hit hardest by the global financial crisis on the one hand, and the sheer size of the sector on the other. This sector represents about 10 percent of all European companies (about 2 million undertakings) and 6 percent of total employment. In Quebec, more than 125,000 people work in the social economy, generating about 6 percent of Quebec’s gross domestic product. In the United Kingdom, there are an estimated 62,000 social enterprises that contribute £24 billion (US$39.7 billion) to the economy and employ 800,000 people (ILO, 2013). It is important to remember that the sector’s sustainable growth requires a set of actions that converge between municipal, county or provincial, national, and regional (and even global) levels. The sector also needs to be closely connected with states, for-profit enterprises, and global value chains—though this is likely to lead to conflicts and dilemmas given differences in various actors’ priorities, approaches, and expectations. 22

Another important subcomponent of social economy considerations should be their choice of instruments. In addition to the popular social cooperative form, interventions should consider the potential role of self-employment and microentrepreneurship. A wide range of global experience suggests that poor groups can benefit from self-employment through entrepreneurial activity. Hundreds of millions of people in developing countries earn their living through small-scale businesses; recent evidence from 13 countries finds that close to one-quarter of poor households has at least one self-employed member. 23 Enhancing small- scale entrepreneurial activity has long been considered an important component of poverty alleviation efforts. In this respect, increasing attention is being paid to the role of microcredit, both in global development efforts and in the EU cohesion policy context. It is also important to remember that the impact of microcredit schemes on business outcomes, especially for the poorest, is still largely unknown, and many banks that target the poor realize low or negative profits.24

6.3 Social economy in Hungary—and its lessons

The size and structure of the social economy in Hungary are difficult to identify. One estimate by CIRIEC (2012) compared paid employment in the social economy to total paid

22 Duncan, 2013, http://blogs.worldbank.org/publicsphere/what-social-and-solidarity-economy-and-why-does- it-matter 23 A. Banerji and E. Duflo (2006) The Economic Lives of the Poor.. 24 P. Dupas and J. Robinson (2009) Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya..

45 employment (2009–2010). According to this calculation, the size of the social economy amounted to 4.71 percent in Hungary, giving it the second-highest weight in new EU member states’ economies after Estonia (6.63 percent), and close to the EU–27 average of 6.53 percent. This definition includes employment in cooperatives, mutual societies, and associations, but neglects the fact that most cooperatives and mutuals are in fact for-profit ventures, and associations include the whole nonprofit sector, even those with a broader mandate than social economy.

An alternative, more conservative approach established by Mike and Ruszkai (2012) includes nonprofit organizations that only either support employment or social policy, or provide employment to vulnerable and disadvantaged groups. This approach—while not necessarily compatible with the EC definition of social economy activities—allows for an estimation of the size of social economy within the nonprofit sector: 1,304 (or approximately 53 percent of all) nonprofit enterprises, and 14,962 (or approximately 24 percent of all) other nonprofit organizations had an activity related to social economy (education, social care, or economic development and labor).

The above estimate does not include social cooperatives. For close to a decade, Hungary has been developing and cultivating the growth of social economy operators through various legislative and financial instruments. The Law of 10/2006 and Government Decree 141/2006 provide for the establishment of social cooperatives, which offer or organize employment opportunities for members or develop activities that can improve their welfare and social status. On the basis of this legislation, the National Employment Foundation has rolled out a support program aimed at cultivating the growth of social economy operators. As a result of these efforts, a broad range of social cooperatives exist in a variety of sectors, including manufacturing, service provision, and social activities. As of 2014, approximately 2,000 social cooperatives were estimated to exist in Hungary, providing employment for about 14,000 members, 3,000 further employees, and approximately 1,500 public workers.25

According to a 2011 methodological manual 26 on social cooperatives, the Hungarian legislative framework has yet to respond to the aforementioned heterogeneity of social cooperatives, which is broadly considered to be an impediment to sector growth. Further issues regarding operating social cooperatives emanate from financial and material constraints (as a result of difficulties with marketing and sales activities), and capital constraints (lack of assets and infrastructure, in particular). Social economy operators report further problems arising from (i) a (relative) lack of confidence by the financial sector and business community in social cooperatives; and (ii) a lack of motivation, initiative, and sense of responsibility among members. The cooperatives are not sufficiently embedded in local supply chains, which further constrains their opportunities for networking and growth, as

25 See http://100000munkahely.hu/2014/10/az-eu-tenyleg-szocialis-gazdasagot-epit. By Fall 2015 there has not been any robust and systematic data collection on the functioning of the over 100 social cooperatives which have emerged to serve public employment options. 26 See http://www.szocialisgazdasag.hu/uploads//pdf/mkezikonyv.pdf.

46 well as their capacity to transfer knowledge. Operators also report that the entry process for unemployed new members into the cooperatives can sometime cause conflict.

6.4 Box 1. Lessons from Kiútprogram and Autonómia’s SIMS program

A closer look at social economy interventions developed in recent years also imparts several useful lessons. Interviews with Kiútprogram, a Hungarian operator that focuses on fostering microentrepreneurship, suggests that within an entrepreneurship project, providing the participants with hands-on, practical experience in starting and operating a formal business provides crucial inputs. Additionally, in order to be successful, social economy initiatives should support potential clients as they identify business opportunities with demonstrated demand and also connect them to existing production chains.

The operator of Autonómia Foundation’s Social Innovation and mutual learning on Micro-Saving in Europe (SIMS) Program (which, among other interventions, included programs that facilitate the development of income-generating activities for poor households) notes that partnerships are key, both in terms of the relationship between the local mentors and program participants, and the program managers’ relationship with local authorities. The program has also experienced difficulties due to the fact that poor participants often have unstable income, which required considerable flexibility in program design. In terms of knowledge transfer and learning, participants required sufficient technical training programs so as to make these programs interesting and engaging.

Source: Semistructured interviews by Kiútprogram and Autonómia Foundation, 2013.

Against this background, in its 2015 National Reform Program (NRP) the Hungarian government has committed to further facilitating the growth of social economy as a way to promote sustainable and quality employment and labor mobility, and as a way to attain national EU 2020 targets. In the NRP, the government commits to encouraging the growth of social enterprises by supporting the production of marketable products and services, with co-financing from European Social Fund. According to the NRP, this will make possible the intermediary labor market employment of public workers, and may later contribute to a stronger connection to the primary labor market.

6.5 Looking ahead

While the Hungarian government has committed to continuing its support of social economy through the Economic Development and Innovation Operational Program (GINOP), it remains unclear if any interventions are planned to address the aforementioned shortcomings, or to develop new financial or legislative initiatives that may create a more enabling environment for social economy, including nonprofit enterprises and organizations.

Such interventions would strongly benefit from a rigorous stocktaking exercise of the lessons learned from social economy programs supported by TÁMOP in the 2007–2013 period. For example, 361 social cooperatives benefited from TÁMOP 243/D (supporting social economy

47 in the convergence regions). Other TÁMOP calls (553, 513) have also provided resources to social economy activities. Some case studies presented as an Annex to this report offer insight into these experiences, while others (Kiútprogram, Gyulaj) provide (limited) inputs regarding the opportunities and limitations of social economy interventions as of today.

In addition to an ex post look at the experience of various development interventions aimed at facilitating the growth of social economy, some global lessons could offer insights for policy makers regarding how to best “fit” social economy initiatives into Hungary’s socioeconomic context. One way to further develop these dimensions would be to seek answers to the following guiding questions:

1. How does social economy interact with social safety nets in general, and with the delivery of social services in Hungary?

2. How can public policy and legislation create an enabling environment for social economy initiatives, for example by making it easier to “do business” for social economy operators?

3. How can social economy be leveraged to address gender gaps (for example, schemes that specifically target the employment of women from disadvantaged groups)?

4. How can economic empowerment via social economy be leveraged toward community voice and collective action?

Beyond these strategic dimensions, some limited answers could be immediately sought to the following question: How can social economy positively affect local-level development trends in poor Hungarian villages or towns, or in marginalized urban areas? In this respect, LEPs can be an effective instrument for identifying local-level employment or skills gaps or social service capacity constraints that may be best served through social economy vehicles, and subsequently for developing and delivering such interventions. The case of Gyulaj offers another example of planning and implementing social economy interventions through a strong partnership and close collaboration with local stakeholders.

48 7 Main findings and recommendations

This report has analyzed experiences with implementing comprehensive social inclusion interventions from three angles: (i) conducting an institutional assessment of Hungary’s Equality of Opportunity framework; (ii) reviewing experiences with the design and implementation of social inclusion approaches in the Czech Republic, Poland, and Slovakia; and (iii) identifying lessons from local-level social inclusion activities in Hungary. This review has produced insights regarding how to address the most important bottlenecks with regard to planning and implementing LEPs, including capacity, community engagement, and financing bottlenecks. The main findings presented here are intended to inform any revisions and structural modifications that will be made to the overall LEP planning and implementation framework at the national level. The recommendations focus more concretely on ways to improve LEPs’ roles in safeguarding equal opportunities at the local level.

Addressing the capacity bottleneck

Broad political and public consensus on strategy content and implementation structures, processes, and costs is necessary to ensure the continuity and impact of national social inclusion strategies. In all three cases, political discontinuity has disrupted (in the case of the Czech Republic) or derailed (in the case of Slovakia) the effective implementation of the social inclusion strategy. Brokering a broad partisan and public consensus that includes all relevant stakeholders—starting with the affected communities and including teachers, employers, health professionals, NGOs, academics, church officials, and the media—is therefore an important condition to ensure the successful implementation of national social inclusion strategies at the local level. Such a consensus will need to manage expectations and produce a realistic joint vision regarding the strategy’s expected results, time frame, and impact.

The national entity appointed to manage the implementation of the LEP process needs to be equipped with a clearly defined mandate, authority, and sufficient financial resources to manage the complete project cycle, from planning through implementation and M&E. Adequate resources for TA during planning and implementation are necessary to ensure that strategies have a chance of being actually implemented.

Sufficient resources for meaningful TA need to be earmarked to adequately support municipalities during planning and implementation. This includes developing well-defined exit strategies. The availability of adequate TA and hands-on support during the planning and implementation phase of the municipal strategies has been a key factor in effectively delivering local social inclusion strategies. Its absence was, on the other hand, a key shortcoming during the implementation of the Comprehensive Approach in Slovakia, and contributed to its failure. Moreover, successful implementation includes the presence of a well-defined and well-executed results-oriented exit strategy. While the overall objectives of

49 improved social inclusion will only be achieved gradually and in the medium to long term, it is important that municipalities design their interventions with a clearly defined strategy for how to release beneficiaries from the interventions. The exit strategy needs to be grounded in the program objectives and not depend on fixed-year limits or budget constraints.27

Investing in and facilitating peer learning and good practice exchanges is an effective and cost-efficient way to strengthen local capacity. Exchanging experiences and learning from good practices is one of the most effective ways to break isolation, bring local stakeholders together, and strengthen capacity. To take full advantage of the positive effects of assessing practices on the basis of common criteria, sufficient resources need to be allocated to the systematic collection and classification of practices, as proposed in Section 6. Effective dissemination and knowledge sharing activities should be developed. Project implementers would benefit from forming district- or national-level communities of practice where they can regularly consult with each other when dealing with technical or administrative issues. Organizing conferences and workshops at regional or municipal levels could also be useful for facilitating peer learning; lessons could be built around discussing practical challenges and solutions encountered during implementation. This way, stakeholders could benefit from a broader set of expert and technical skills that are not readily available in every community.

Addressing the community engagement bottleneck28

Formal platforms for continuous stakeholder engagement and interactions need to be established, with a particular focus on engaging the most marginalized groups. Successful social inclusion interventions depend to a large degree on the local stakeholders’ active involvement and ownership over the process. For that, stakeholders need to trust each other and believe that their involvement can actually make a difference and add value. One- off consultations with stakeholders at select stages of the project cycle is likely not sufficient to build the necessary level of commitment, ensure ownership over the project, or make project activities sustainable. This is particularly the case in municipalities that are experiencing social tensions and low levels of trust—that is, communities that cannot fall back on a tradition of citizen engagement. Establishing meaningful, accessible, and inclusive communication and local-level stakeholder engagement platforms is a good way to build ownership and sustainability. In addition, in cases where local governments have a track record of using participation tools unsuccessfully, the support from well-trained, committed, and experienced outside facilitators is an important factor for success.

27 The Chile Solidario Program is an interesting example in this context. The program, which is explicitly designed as a bridge program to connect vulnerable families to relevant social services, releases its beneficiary households based on an explicitly phased program design consisting of a two-year intervention and a subsequent three-year exit phase, with frozen payment amounts designed to encourage graduation to other services and programs. 28 Until closing the drafting process of this report in Fall 2015, the team did not have information about the experience of the district-level cooperative activities (ÁROP 1.A.3.)

50 Mediating between majority and minority seems to be an important mechanism for enhancing local-level participation and building mutual trust. Social workers—provided they are well trained and have a relatively low case load—can play a key role in coordinating local stakeholders, including teachers, mediators, health professionals, and public employment and social assistance services. This requires adequate training and funding resources for social workers.

Communities should be engaged during all stages of LEP planning and implementation, including the M&E phase. Community participation in M&E offers important ways to assess and learn from interventions and to understand the extent to which they have addressed communities’ genuine needs. Participatory monitoring is not only geared toward measuring an intervention’s effectiveness and identifying potential corrective measures, but also toward the improved communication with—as well as ownership and empowerment of— project beneficiaries.29

Addressing the financing bottleneck

Municipalities should be encouraged to use their own budget, even if limited, to finance the preparatory work that will lay the groundwork for accessing funds for more complex interventions. Municipalities often underestimate the importance of preparatory work when implementing complex social inclusion interventions. This includes investing in “soft issues” such as community outreach and mobilization, developing community engagement mechanisms and platforms, and addressing local tensions around the social inclusion agenda head-on to avoid community conflicts later. This work does not require large budgets, and municipalities should be able to cover these costs without external funding. Investing in these soft measures early will not only increase the relevance of externally funded activities, but also improve their effectiveness and sustainability.

A central database can provide access to relevant resources, including information on funding sources for LEP implementation. One of the key impediments to effective LEP implementation is the lack of adequate resources. Often, the real problem is not actually the scarcity of resources, but rather the fact that they are scattered and not easily accessible. To address this problem, a central resource database should be developed. Such a database could contain a compilation of effective interventions and relevant best practices based on the criteria established in Section 6, which would make them readily available to the public.30 In addition, it should provide an overview of relevant national programs, funding mechanisms, and subsidies that local actors can access to finance social inclusion interventions. This database should be designed in a user-friendly manner, easy to navigate, and receive regular maintenance and updating.

29 More information and practical considerations for developing participatory M&E mechanisms can be found in Guidance Note 4 in the Handbook for the Implementation of Local Equal Opportunity Plans in Hungary. 30 A successful example of such a database can be found on the What Works Clearinghouse (WWC), created by the U.S. Department of Education’s Institute of Education Sciences (http://ies.ed.gov/ncee/wwc).

51 The recommendations presented here provide concrete guidance for priority actions that can improve equality outcomes at the local level. The recommendations are underpinned by the following considerations:

(1) The core function of LEPs is to introduce an equality safeguard—or “conditionality”— to use development policy funds (primarily EU ones) with the objective of ensuring that mainstream projects do not inadvertently widen inequalities but rather promote equality (as part of the equality-oriented development policy).31

(2) Since inequalities can be addressed by public services at least as much as by EU- funded activities, LEPs should also contribute to more equality-oriented public service provision.

(3) Since LEPs were introduced, the landscape has changed radically:

(a) management of public services—especially management of schools—has been centralized to the state level, with coordination roles at county and district levels;

(b) a massive public works program has been launched, the management of which is the responsibility of local governments (in fact, managing public works programs has become the main activity of several local governments);

(c) in the 2014–2020 period, sizeable EU funds will be allocated for project packages in counties and towns with county rights where equality safeguards are either missing or weak (for example, in towns with county rights, anti- segregation plans have had limited scope and are typically not followed through in project packages).

In view of these considerations, the recommendations are formulated for three areas:

(i) streamlining and revitalizing LEPs in general

(ii) introducing and implementing county equality programs (CEPs)

(iii) following up on LEPs in towns with county rights

Recommendations (i) and (ii) should be implemented as a priority and with urgency, to ensure that they can be included in the process of approving project packages for counties and towns with county rights. Recommendation (iii), on the other hand, should be implemented once the next revision of LEPs is due (around 2018).

31 The term “equality-oriented development policy” has been replaced by “inclusion-oriented development policy” (or more precisely, “development policy based on inclusion principle”); see National Social Inclusion Strategy (2011, p. 57).

52 7.1 Recommendations for streamlining and revitalizing LEPs

Objectives:

 Create new ways for the local and central levels to communicate and interact.

 Find ways for local decision makers to discuss LEPs and acknowledge them as instruments for guiding decisions about reorganizing local public services and initiating local developments.

 Streamline processes for the development of LEPs in a way that reduces superfluous work for professionals and makes LEP content more concise and manageable. This will encourage stakeholders, including local decision makers, to use these documents in their day-to-day work.

Elements:

Phase 1: Defining LEP format and content

 The analytical requirements for LEPs should be significantly shortened, especially for smaller localities.

 LEP length should be fixed at (i) no more than 15 pages in localities without locally organized public services (such as kindergartens, general practitioners, health visitors, and so on), and (ii) no more than 50 pages in localities with fewer than 10,000 inhabitants.

 All LEPs should include

o an executive summary that highlights the most relevant information from the analytical part and the action plan; the length of the executive summary should not exceed 1/10 of the total length of the LEP;

o a brief section on how public works can contribute to promoting equality in the locality;

o a brief section on communicating with stakeholders and systematically involving target groups;

o a section on timing, including an annual schedule (at a minimum).

 Where applicable, LEPs should identify social economy interventions that can contribute to social impact at the local level through improved employment or skills outcomes, or improved access to social services.

53 Phase 2: Targeting LEPs to relevant groups

 Local governments should be encouraged to better differentiate between target groups and to make strategic choices in that context. They should identify the most relevant target groups, use the analytical part of the LEP to offer a deeper analysis of the challenges they face, and plan more specific actions for these groups in the action plan. This may be especially relevant in smaller localities where target group relevance is likely to be less balanced—and capacities more limited—than in larger localities.

Phase 3: Planning relevant interventions for the target groups

 LEP interventions should be categorized according to funding needs and institutional design. Each action should be grouped into one of the following categories:

a) the intervention can be implemented by the local government without additional external funding;

b) the intervention can be implemented by the local government with additional external funding;

c) the intervention can be implemented by the local government as part of a planned larger project (that is, a planned urban rehabilitation project should pay attention to specific equality issues);

d) the intervention can be implemented by or in cooperation with another actor (such as a county or state institution that provides a public service).

Phase 4: Stakeholder engagement and quality control

 Equality experts employed by the central level (for example, mentors at TKKI) should be tasked and empowered to check draft LEPs before the local government sends them for approval. They should withhold drafts that do not comply with legislative requirements, and local governments should be required to make corrections accordingly.*

 Experienced and trained equality experts should also be tasked and empowered to formulate comments, questions, and recommendations for improving the drafts. Local governments should consider and respond to comments without being required to accept all of them. Both the comments of equality experts and the local government’s response should be attached to the final version of the LEP.*

 Along with equality experts, NGOs working with target groups to promote their inclusion in the locality should also be invited to comment on the LEP (for example,

54 within a period of two weeks). Local governments should be formally required to consider and respond to comments. Both the NGOs’ comments and local government responses should be attached to the final LEP.*

 The final version of the LEP should be available on local government websites.

Phase 5: Implementing the LEPs

 Funding could be offered to each district for coordinating and monitoring LEP implementation. The amount can be around €30,000 per district per year on average,32 or around €37 million altogether. The funding source can be the Public Administration and Services OP.

Phase 6: Monitoring

 Each year, local governments should prepare a brief annual progress report on LEP implementation. It should include information on actions implemented or have started to be implemented, explain delays, and where relevant, include a summary of changes. This report could be one page for smaller localities and up to five pages for the largest localities.

 Equality experts and NGOs could also comment on annual progress reports (for example, with one week’s notice).*

 Annual progress reports should be available on local government websites.

Benefits:

 Offers potential policy gains through structured iterations between local and central level, without giving veto rights to equality experts (beyond what constitutes compliance with legislation).

 Offers potential policy gains through structured consultation with NGOs working on equality in the locality; also offers improved coordination and interaction with target groups.

 Leads to better structured, more readable and usable documents.

 Creates information on implementation.

 Saves work by creating shorter documents at the local level.

 May create capacities at the district level to coordinate and monitor LEP implementation (serving all localities in the district).

32 There are differences across the districts in terms of the number of settlements belonging to one disctrict, therefore, a differentiation of funding could be necessary.

55 Costs:

 Demands quantitative and qualitative capacities at the central level.

 Results can be increased by using funding earmarked for coordinating and monitoring LEP implementation under the Public Administration and Services OP (in total, around €37 million).

Elements marked with an asterisk can be limited to localities above, say, 10,000 inhabitants. As these localities account for 60 percent of the national population and less than 5 percent of the localities, this limitation would retain many of the potential policy gains and radically decrease the demand (and related costs) for quantitative and qualitative capacities at central level. At a very minimum, these components should be introduced for towns with county rights, as new period EU funds are specifically allocated to towns with county rights (€1.25 billion in priority axis 6 of the Regional and Urban Development OP).

7.2 Recommendations for developing an equality safeguard for EU-financed LEP activities in towns with country rights

Objective:

In addition to streamlining LEPs, an additional equality safeguard should be introduced for EU-financed activities that are going to be managed by towns with county rights, as EU funds for the 2014–2020 financing period are specifically allocated to counties.

Elements:

Equality experts should assess the project packages and each project proposal33 in the package from an equality angle:

 Each package should be grouped into one of the following categories: (i) decreases internal inequalities (positive); (ii) is neutral; or (iii) increases internal inequalities

33 While most components are self-explanatory, assessing project packages requires further clarification. There are fundamental differences between various LEP target groups, particularly between (i) people in extreme poverty and Roma; and (ii) children, women, the elderly, and people with disabilities. For children, women, the elderly, and people with disabilities, the negative scenario involves failing to improve their situation. For people in extreme poverty and the Roma, the negative scenario may not only mean that their situation has not improved, but that they are actually worse off due to the failed project. Additionally, due to segregation and exclusion, negatively assessed projects can more easily increase inequality for people in extreme poverty and Roma than for those pertaining to children, women, the elderly, and people with disabilities. For these reasons, it is more critical to avoid implementing negatively assessed projects for people in extreme poverty and Roma than it is for children, women, the elderly, and people with disabilities. Additionally, promoting equality involves much more than merely avoiding the implementation of negatively assessed projects: the prerequisite of decreasing inequalities at the local level is a positive measure.

56 (negative). Negative assessments should be justified. Towns should revise any packages with negative assessments.

 Each project proposal should be grouped into one of the following categories: (i) positive; (ii) neutral; or (iii) negative. Negative assessments should be justified. Negatively assessed project proposals should be replaced.

Benefits:

Equality safeguards ensure that EU funding for the 2014–2020 financing period, which is specifically allocated to towns with county rights (€1.25 billion in priority axis 6 of the Regional and Urban Development OP), will not inadvertently contribute to increased inequality but rather improve equality outcomes.

Costs:

 Requires quantitative and qualitative expert capacities at county and central level.

 Requires time.

7.3 Recommendations for developing county equality programs (CEPs)

Objectives:

 To provide territorial information on major challenges and ideas about how to address them, so that, for example, the county’s government commissioner and relevant sectoral institutions (such as KLIK for schools, MfNE for training centers, MoI for public works) can harmonize their actions, with a view toward preventing open conflicts.

 To introduce equality safeguards at the county level, since in the new period of EU funds, the county-level planning will be strengthened and allocation will also primarily focus on counties (according to Annex 2 of Government Decree 1702/2014 (3 Dec), 18 counties plan for €2.6 billion in the Regional and Urban Development OP).34

Elements:

Phase 1: Defining the format and content

Each county should prepare a county equality program (CEP) that should identify major bottlenecks of equality (such as the largest segregated areas where challenges cannot be addressed by the local government alone), actions to address the bottlenecks, and how the

34 Pest County and Budapest are not covered by this OP.

57 county’s project proposals in the new period relate to the bottlenecks. CEPs should include specific sections on each district. They should focus on issues that can be addressed by the county—that is, they should not duplicate LEPs35. CEPs should also include:

 An executive summary that offers the most relevant information about bottlenecks, actions to address them, and how larger project proposals relate to the bottlenecks. Executive summaries should not be longer than 1/10 of the CEP.

 A brief section on how to communicate with stakeholders and how to involve target groups and local governments.

 A section on timing, with a detailed annual schedule, at a minimum.

Phase 2: Targeting CEPs to relevant groups

In order to identify relevant CEP target groups, counties should first be able to identify their territory’s most pressing social challenges. The accompanying report titled Hungary: Measuring Inclusive Growth Enhanced Development Impact: Targeting and Monitoring of EU Co-funded Social Inclusion Activities at the Subregional Level offers a way to develop a set of indicators to collect to identify these social challenges, and also to track progress on social inclusion at the subregional level. These indicators should: (i) be available at a highly disaggregated geographical level (microregion or district); (ii) be affected relatively quickly by changes in social inclusion/exclusion; and (iii) be available on a regular basis (ideally annually). The report identifies 22 such indicators that cover the thematic areas of (i) monetary poverty and material resources; (ii) employment/labor; (iii) education and health; and (iv) housing and living conditions.

Phase 3: Planning relevant interventions for target groups

Interventions in the CEP should be categorized according to funding needs and institutional design. Each action should be grouped into one of the following categories:

 the intervention can be implemented by the county without additional external funding;

 the intervention can be implemented by the county with additional external funding;

 the intervention should be implemented by the county as part of planned larger projects (for example, projects financed under the OPs);

 the intervention can be implemented by the county in cooperation with another actor (such as a local government or a state institution that provides a public service).

Phase 4: Stakeholder engagement and quality control

35 However these should build on a synthesis of LEPs, for exampel aggregated at the district level.

58  Experienced and trained equality experts employed by the central level should be tasked and empowered to formulate comments, questions, and recommendations for improving the drafts. Counties should consider and respond to comments, without being required to accept all of them. Both comments from equality experts and the county’s response should be attached to the final version of the CEP.

 Along with equality experts, NGOs working most actively with CEP target groups to promote their equality in the county should also be invited to formulate comments (such as within a time frame of two weeks). At a minimum, two NGOs working most actively in the county for each target group should be directly invited for this consultation. Counties should consider and respond to comments. Comments from NGOs and local governments’ responses should be attached to the final version of the CEP.

 The final version of the CEPs should be available on county websites.

Phase 5: CEP implementation

Equality experts should assess the project packages and each project proposal in the package through an equality lens.

 Each project proposal package should be grouped into one of the following categories: (i) decreases internal inequalities (positive); (ii) neutral; or (iii) increases internal inequalities (negative). Negative assessments should be justified. Counties should revise packages with negative assessments.

 Each project proposal should be grouped into one of the following categories: (i) positive; (ii) neutral; or (iii) negative. Negative assessments should be justified. Project proposals with negative assessments should be replaced.

 Funding could be offered to each county for coordinating and monitoring LEP implementation. The amount should be around €30,000 per county per year, or around €4 million altogether. The source of funding can be the Public Administration and Services OP.

Phase 6: CEP Monitoring

 Each year, counties should prepare a brief annual progress report on CEP implementation. It should include information on actions that have been implemented or have started to be implemented, information on how projects address bottlenecks, justification of any delays, and, where relevant, a summary of changes. Such a report should be up to 10 pages long.

 Equality experts and NGOs could comment on annual progress reports (such as with one week’s notice).

59  Annual progress reports should be available on county websites.

Benefits:

 Offers potential policy gains through structured iteration between the county and central levels.

 Offers potential policy gains through structured consultation with NGOs working on equality in the county.

 Establishes equality safeguards at the county level, as in the new period EU funds are specifically allocated to counties.

 Creates information on implementation.

 Creates capacities at the county level for coordinating and monitoring CEP implementation.

Costs:

 Demands quantitative and qualitative capacities at the county and central levels.

 Needs time.

 Results can be increased with funding offered for coordinating and monitoring CEP implementation (around €4 million altogether, from the Public Administration and Services OP).

60 8. References

ASI (Agency for Social Inclusion). 2012. Social Inclusion in the Municipality. Handbook for Municipalities. Prague: ASI.

Balog, Z. n.d. Hungarian National Social Inclusion Strategy. http://romagov.kormany.hu/hungarian-national-social-inclusion-strategy-deep- poverty-child-poverty-and-the-roma.

Banerjee A., and E. Duflo. 2006. The Economic Lives of the Poor.

CIRIEC. 2007. “The Social Economy in the European Union.” Working paper, CIRIEC No. 2008/02, European Economic and Social Committee, Brussels.

CIRIEC. 2008. “The Social Economy in the European Union.” Working Paper No. 2008/02, CIRIEC, Liège, Belgium. http://www.ciriec.ulg.ac.be/fr/telechargements/WORKING_PAPERS/WP08-02.pdf.

CIRIEC. 2012. “The Social Economy in the European Union.” Report, EESC, Brussels. http://www.eesc.europa.eu/resources/docs/qe-31-12-784-en-c.pdf.

Dupas, P., and J. Robinson. 2009. “Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya.” Working Paper 14693, National Bureau of Economic Research, Cambridge, MA.

EC (European Commission). 2011. “Creating a Favourable Climate for Social Enterprises, Key Stakeholders in the Social Economy and Innovation.” Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions—Social Business Initiative, EC, Brussels. http://ec.europa.eu/internal_market/social_business/docs/COM2011_682_en.pdf.

EC. 2015. “Programming Period 2014-2020. Monitoring and Evaluation European Cohesion Policy.” Guidance Document, European Social Fund.

Galasso, E. 2006. With Their Effort and One Opportunity: Alleviating Extreme Poverty in Chile. Development Research Group. Unpublished. Washington DC: World Bank.

Green, D. 2013. “What Is Social and Solidarity Economy and Why Does It Matter?” World Bank [blog], April 30. http://blogs.worldbank.org/publicsphere/what-social-and- solidarity-economy-and-why-does-it-matter.

ILO (International Labour Organization). 2013. The Social and Solidarity Economy. Geneva: ILO.

61 NSIS (National Security Intelligence Section). 2011. “Magyar nemzeti társadalmi felzárkózási stratégia ii. Tartósan rászorulók—szegény családban élő gyermekek –Romák (2011– 2020).” Report, Emberi Erőforrások Minisztériuma, Budapest. http://ec.europa.eu/justice/discrimination/files/roma_hungary_strategy2_hu.pdf.

OECD (Organisation for Economic Co-operation and Development). 2013. Job Creation Through the Social Economy and Social Entrepreneurship. Paris: OECD.

Ruszkai, Z., and K. Mike. 2012. “Social Economy—Laying the Groundwork for Innovative Solutions to Today’s Challenges.” Peer Review, Social Protection and Social Inclusion Programme, ÖSB Consulting, Paris.

SGI (Slovak Governance Institute). 2013. Lessons from Slovakia’s Comprehensive Approach. Bratislava: SGI.

Sirovátka, T. 2011. “Promoting Social Inclusion of Roma: A Study of National Policies.” Peer Review, European Commission.

Sirovátka, T, and R. Miroslava. 2007. “The Strategy of Social Inclusion in the Czech Republic.” Masaryk University and Research Institute of Labour and Social Affairs, Prague.

UNDP (United Nations Development Programme). 2012. “Social Economy and Roma Communities: Challenges and Opportunities.” Report, UNDP, Bucharest. http://www.undp.ro/libraries/projects/Social_Economy_and_Roma_Communities_C hallenges_and_Opportunities.pdf.

UNDP, World Bank, and EC. 2011. Regional Roma Survey.

World Bank. 2009. “Poland: Social Inclusion.” http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22237752~pag ePK:34370~piPK:34424~theSitePK:4607,00.html.

World Bank. 2012a. “Implementation Completion and Results Report (IBRD-73580) on a Loan in the Amount of Euro 72.2 Million (US$88.8 Million Equivalent) to the Republic of Poland for a Post-accession Rural Support Project.” Report No: ICR2337, World Bank, Washington, DC.

World Bank. 2012b. “Strengthening Social Inclusion Through Innovations in Service Delivery in Poland.” http://www.worldbank.org/en/results/2012/04/17/strengthening-social- inclusion-through-innovations-in-service-delivery-in-poland.

World Bank. 2014. Portraits of Labor Market Exclusion. Washington, DC: World Bank.

62 World Bank. 2015. Handbook for Improving the Living Conditions of Roma. Washington, DC: World Bank.

Zpráva o stavu romských komunit v České republice za rok 2007, 2008, 2009 (2008, 2009 2010), Zpráva o stavu romské menšiny 2010. 2011. Praha: Úřad vlády ČR. http://www.vlada.cz/scripts/detail.php?pgid=490.

63 Annex I. Case studies

The case studies that were developed for this section rely largely on qualitative rather than quantitative inputs due to a lack of available quantitative data on targets, outputs, and outcomes. For this reason, the case studies do not include, for example, a proper cost- benefit analysis. The challenges related to the lack of available data points to the need to collect data and measure results more systematically. The report Hungary: Measuring Inclusive Growth for Enhanced Development Impact provides relevant guidance in that context.

Locality, title of case Region Population Target group Topic Education Porcsalma: A safe start into Northern 2,700 poor and Roma, education, other; life Great Plain children early childhood development Integrated education in Ács Central 6,800 poor and Roma, education Transdanubia children Employment The farming village of Gyulaj South 1,000 poor and Roma employment, social Transdanubia services Katymár, social economy South Great 2100 poor and Roma employment, social Plain services Karcsa, combining EU funding North 2000 poor and Roma employment (income and public works programs Hungarian supplement Region generation) Kiútprogram: Income Northern 1,000– poor and Roma employment (income generation in Szabolcs- Great Plain 4,000 supplement) Szatmár-Bereg county Housing Social rehabilitation and South 146,000 poor and Roma housing housing integration in Pécs Transdanubia Integrated approach Békéscsaba, a city of Southern 60,000 poor and Roma, education, cooperation Great Plain children, women, employment, health elderly, disabled care, housing, social services The thoughtful town: Northern 5,600 poor and Roma, education, Jászfényszaru Great Plain children, women employment, health care, social services, other: community building Other Alsómocsolád, a village of South 300 poor and Roma, other: project entrepreneurs Transdanubia children, elderly management capacity

64

Porcsalma: A safe start into life

people living Target group: poor, Roma children women elderly with other disabilities

other: early education social Specialization: health care employment housing childhood and training services development

Sure Start in Porcsalma

Background

Porcsalma is a large village of 2,500 inhabitants Quick facts near the Hungarian–Ukrainian–Romanian triple border. The settlement belongs to one of the District: Csenger most disadvantaged districts of the country to be County: Szabolcs-Szatmár-Bereg developed with a complex program—the Csenger district. 36 In terms of employment Region: North Alföld figures, the district has one of the worst rates in the country. More than one-third of the Population of the settlement: 2,500 population is Roma. The majority live in Objective: Early childhood development of segregation. Almost half of the Roma children in a segregated environment settlement’s 800 inhabitants (which includes 200 families) are children. Period of implementation: 2010–2015

There is no crèche at the settlement, and over 70 Amount and type of funds used: The percent of children who attend kindergarten are development and operation of the Safe Start Roma. The percentage of Roma children in the Children’s House was implemented with KLIK-operated general school exceeds 60 47,363,506 HUF ESF (European Social Fund; in percent. Hungarian, ESZA) funding. The house is operated with smaller than initially envisaged professional The aim of the Biztos Kezdet (Safe Start) Program staff and with financing from national sources. is to support children aged 0–5 and their families, so that the children receive help for their Most important experiences: (i) The Safe Start

36 Government Decree No. 105/2015 (IV. 23.) on the classification of the beneficiary settlements and on the conditions of classification.

65 physical, mental, emotional and social Children’s Houses play an important role in early development at an early age.37 childhood development. The children who attend these houses are more confident and open in The development and operation of the Safe Start kindergarten; (ii) The involvement of the Children’s House was the settlement’s first interested and implementing parties in the significant, non–investment-type program. planning and preparation process essentially Autonomy Foundation was involved in the determines the success of a program. program’s design and elaboration. Community talks, professional coordination, and the For what settlements can the experiences be involvement of would-be officials in the initial useful? Settlements with much higher-than- stage before the application was submitted average rates of disadvantaged and multiple greatly helped its acceptance in the settlement. disadvantaged children.

Thanks to the program’s initial successes, the Who can be contacted for further information? municipality became more aware of the social Kanyó Imre mayor, Porcsalma inclusion challenges of certain population groups, and now attaches great importance to human development in its development strategy. In the past, a civil organization operated a study hall with the municipality’s involvement, while in the framework of the microregional children’s help program, a settlement-type community house started to operate.

Activities

The municipality officials and the settlement mayor first heard about the Safe Start Children’s House when planning the development program for the most disadvantaged microregions. It was also at this point that they came into contact with the Autonomy Foundation. By launching its program in 2009, the Foundation helped38 local municipalities and civil organizations start EU-financed Roma integration projects that focused on genuine local needs. The Porcsalma application to establish a Children’s House was the result of a joint development process. The Foundation helped elaborate the application in the framework of a multiround local planning discussion. Teachers, district nurses, family consultants of the child welfare service, and—on some occasions—the mayor took part in the planning process. The would-be employees of the Children’s House were also involved in the planning phase.

Identifying the problem at the beginning of the process did not pose any special challenge. The local officials had already experienced that many children who started kindergarten came from highly disadvantaged backgrounds and were not able to sufficiently catch up with their less disadvantaged peers by the time they entered formal school. Many children came to the institution from very poor physical living conditions. Almost all Roma children live on the edge of the village in a segregated settlement. This settlement can be accessed via a paved road, and most public utilities are available. In reality, however, few homes have running water and the majority of inhabitants take water from

37 See http://www.gyerekesely.hu/index2.php?option=com_content&do_pdf=1&id=202. 38 See http://autonomia.hu/hu/programok/eu-forrasokkal-a-romak-integraciojaert.

66 the public well.

The Children’s House had to be built up on a rather strict and carefully elaborated methodology. Therefore, it was of utmost importance that during the planning process everyone embraced the spirit of the application and understood exactly what would happen in the house.

The delegates’ assembly and the kindergarten also supported the idea. It was determined that one of the helpers would be a Roma woman. In order to prevent the number of children provided for in kindergarten from decreasing after the house opened, the 0–3 age group and their families were primarily targeted for the services, instead of the 0–5 group initially proposed in the application.

In the end, the municipality received 47,363,506 HUF to support the implementation of the project, which was titled “For you, with you, but not instead of you” Safe Start for Strengthening Social Integration in Porcsalma” (In Hungarian: “Érted, veled, de nem helyetted“ Biztos Kezdet a Társadalmi Integráció Erősítéséért Porcsalmán). The house opened in January 2010 in the former crèche building, roughly halfway between the center of the village and the segregated settlement. Since the investment budget was rather tight, the village only purchased the building materials; local public workers, some of whom were from the segregated settlement, carried out the renovations.

The philosophy of the Safe Start Children’s House was new to both the employees and the families. Unlike a crèche, which provides passive day care to children, the Children’s House focuses on developing their abilities, with the cooperation of their parents. The first results of the operation were visible when parents enrolled those children who formerly attended the house in kindergarten. These students were more confident and assured, made contact with other children more easily, and felt comfortable at school; the kindergarten teachers gave them a lot of positive feedback.

One of the biggest challenges new Children’s Houses face is parental involvement. This house was no different in this respect. After the start of the program the employees personally visited the families and explained to them what services would be available in the house. They also personally handed out invitations to the opening ceremony, and this proved to be a successful contact-building technique. The most successful tool, however, was the fortnightly cooking club. In the house’s garden they planted vegetables that were used in the cooking classes. Comparing the figures of visiting children for other operating Safe Start Children’s Houses (for the first three years) showed that there was clearly smaller fluctuation in the number of visits in the Porcsalma house than elsewhere, and there were no big seasonal differences either; use was rather balanced, which is to be thanked to thorough preparation. However, despite the continuous efforts, involvement of the neediest families and non-Roma parents is still a problem.

During the project, some 10–12 children visited the house daily (about 10 percent of the settlement’s 0–3 year-old children). There was a four-person staff, two of whom are Roma.

Results

One of the most important results of this project is that even though there was a smaller professional staff and a scarcer service package, the house is still operational five years after its opening. This is not commonly found in projects financed from EU funds. The Children’s Houses are lucky in that normative support can be requested for their operation, but this is no guarantee they will survive. In addition to the necessary financial resources being available, it can also be said that the Porcsalma

67 Safe Start Children’s House has been integrated into the life of the settlement and become part of the local institution system. The local decision makers and teachers have gained firsthand experience that with consistent work, tangible results can be reached in the field of integration. Kindergartens have positive feedback about the children who attend the programs, and have only become more supportive of the house.

At the same time, getting the poorest and most needy non-Roma families to attend the house presents a continuous challenge. In the past five years, the management has failed to persuade Roma and non-Roma families to use the house together. Despite repeated attempts, the activation and involvement of the poorest families remains a problem.

Another important achievement for the settlement is the fact that the Safe Start project has paved the way for other development programs. In recent years, a civil organization launched a study hall program with ESF funding, and in the Roma settlement’s neighborhood, a community house was opened under a child opportunity program.

Experiences

The Children’s House has created a new type of relationship between the hard-to-reach families and the public education institutions. Everyone recognizes the achievements, and no one questions the need to keep the house open. The involvement of the neediest families presents a continuous challenge, but this situation can hopefully be improved by the fact that the houses require there to be a lay helper on the professional team who comes from the target group.

Planning and preparation play key roles in the acceptance and integration of a new institution. The longer-than-usual planning and preparatory work contributed to the ownership of and commitment to the activities by the mayor and the local professionals. During implementation, everybody realized that detailed preparation and thorough consideration of the phases were absolutely necessary for such a program to work well. These steps cannot be skipped, but the municipality would not have had sufficient capacity to manage all this. It is important that the external experts involved in the preparation did not prompt what should be written into the application; their presence was rather of a facilitating nature—they coordinated and kept the entire process on track.

68 Integrated education in Ács

people living Target group: poor, Roma children women elderly disabled other with disabilities

health education and social Specialization: employment housing other care training services

Integrated Education, ÁCS

Coeducation: The key to social integration

Background

Ács is a town halfway between Komárom and Győr Quick facts along the M1 motorway, with a declining population (currently 6,800). Around 600–800 District: Komárom Roma live here, of whom 250 live in Vaspuszta and County: Komárom-Esztergom Jegespuszta; 80 reside in the latter quarter. Local unemployment is insignificant; those who fail to Region: Central region of Transdanubia (Közép- find a job on the labor market are given municipal Dunántúl) communal work (about 50 percent of them are Roma). Population: 6,768

Virtually all the underprivileged Roma children Objective: Integrated education with special educational needs went to one of the Period of implementation: 2004–2012 two schools in the town (where their ratio was around 75 percent). In order to remedy this Amount and type of funds used: PHARE, Roma situation, between 2004 and 2012 integrated Education Fund, the Hungarian Soros Foundation. education was gradually introduced using a two- The town also used funds from TÁMOP, TIOP, teacher model and involving child development KDOP (kindergarten and school renovation, teachers. The headmaster—who is of Roma origin extension) during the period referred to above. himself—was elected mayor in 2010, and was reelected in 2014. Key experiences: (i) Coeducation—preceded by the mindful preparation of reforms—is agreeable to The town authorities are committed to integrated the parents (voters). (ii) In this education model, education. The school transferred to the KLIK, but which is supported by specific municipal incentives it maintains the integrated education model with (extra wages), teachers seem to be motivated for a the approval of the school district and longer period of time. (iii) Efficient planning in the complementary financing provided by the local VET system requires cooperation with employers. government. The utility of the model is analyzed in

69 the framework of the LEP with special focus on the For what settlements can the experiences be importance of dedicated funds. useful? This model should be adapted by municipalities in which 20 percent to 30 percent of The main driver of the process is the mayor, who, school-age children are underprivileged. as headmaster, orchestrated the reorganization of education. Who can be contacted for further information? Béla Lakatos, mayor

Activities

In 2004 the headmaster shut down the school for children with special educational needs (the SEN school). Roma students comprised about 75 percent of the students in this school. The majority of the children were gradually integrated in the Gárdonyi Géza Primary School, the town’s largest school. Here, a two-teacher model was introduced in the junior years and the pupils are assisted by a child development teacher and a speech therapist. The transition was supported by the Roma Education Fund. The number of students in the 2012–2013 school year was 575 (against the backdrop of a declining number of children); 102 of these were underprivileged, and 49 came from a family with multiple disadvantages (according to the definition applicable in 2012–2013).

When the SEN school was shut down, the headmaster took care to distribute the children across the different classes evenly, and saw that children who needed such assistance would get appropriate SEN support during classes. He also took steps to ensure that children whose home conditions did not allow for a relaxed learning environment are taught all day at school so that they do not have to study at home. Teachers assigned to the new integrated classes were given a pay raise of 15,000 HUF.

Parents were engaged in constant dialogue with school personnel, and as the teachers were also motivated (some 60 percent of them backed the transformation process) children’s performance did not deteriorate and talent nurturing continued.

Enlarging the scope of vocational school training was another innovative move. In 2005, the headmaster (the future mayor) saw that young people tended to drop out of VET unless it offered clear employment prospects and was nearby (the VET school was 30 km away). Therefore, he mapped out the demands of local employers and arranged for a site in Ács where training in printing technology was provided. Mentoring was financed by the Soros Foundation. This site had to be closed in 2008–2009 due to a lack of funds, but until then it helped 20 young people find employment. This model is not eligible for funding from central programs.

Currently, primary education is delivered at two sites. One building houses only junior-year pupils (approximately 60 pupils of whom 13 percent, or eight pupils, have multiple disadvantages), and in the large school building both junior- and senior-year students are taught (approximately 510 students of whom 8 percent, or 41 students, have multiple disadvantages). Altogether, there are 49 students with

70 multiple disadvantages in the town (data as of 2012–2013). The town could thus manage to distribute children with multiple disadvantages evenly in a way that the two Roma settlements (Vaspuszta and Jegespuszta) are covered by the smaller school’s district. Camps and grants continue to be available to children with the support of the local government.

This integrated education system persisted even after the school was handed over to the KLIK— although it is still run by the local government—because the mayor and the school district cultivated very good relations and they recognize the benefits of integration. In 2009 the ratio of children enrolled in secondary grammar school was around the national average; in 2012, however, indicators showed a drop in this ratio, which then equaled one-third of the national average. The vast majority chose to study in a VET school (in 2011–2012, 41 percent of primary school leavers continued in a secondary vocational school and 42 percent enrolled in a vocational school, while the corresponding national average was 35 and 29 percent, respectively). On the whole, in 2011–2012 the proportion of students enrolled in schools granting a secondary school diploma was 53 percent compared to the national average of 69 percent, and this figure is in line with local labor market demand.

The headmaster resigned in 2010 and decided to run for mayor instead, and was reelected in 2014 by a vast majority. It is very important to note that local decision makers have been deeply committed to social integration at the local level for more than a decade and are willing to devote resources or even enter into conflicts if necessary (also as Roma—for example, the mayor left FIDESZ, the ruling party in the autumn of 2015, in protest against its Roma policy) but they also find allies to forward this cause.

71 The farming village of Gyulaj

people living Target group: poor, Roma children women elderly with disabled other disabilities

health education and social Specialization: employment housing other care training services

Farming Village, Gyulaj

Public works–based agricultural production in a Roma majority village

Background

Gyulaj is a village with nearly 1,000 residents at the edge Quick facts of Tolna County, between Dombóvár and Tamási. The majority of the population is Roma. According to its Subregion: Dombóvár relevant indicators, it is disadvantaged by all aspects and County: Tolna regarded as a beneficiary of socioeconomic and infrastructural aspects, as well as affected by significant Region: Southern Transdanubia unemployment and segregated.39 Population: 1,000 The main problem is extreme poverty. Neither mechanized agriculture (wheat, corn, sunflower) nor industry or Objectives: To reduce extreme poverty; services have created employment opportunities in the social integration of Roma; to stabilize the community or in the vicinity. Only the development of financial management of the local labor-intensive agricultural production (fruits and government vegetables) has opened up employment opportunities. Implementation date: 2010–2015 This has been realized by the local leadership, which came into office in 2006 (Károlyné Dobos, mayor), and the Amount and type of resources used: professionals originally from the village who regularly approx. 610 million HUF; budget: ca. 250 return as volunteers and play active roles in Gyulajért million HUF (mainly public works program); Alapítvány (Foundation for Gyulaj, Ferenc Balipap, ESF: approx. 360 million HUF (SROP 5.1.3, sociologist, community development specialist, Nándor 5.3.6, 1.4.3) Németh, regional development specialist). What are the most important experiences? The first serious attempt to develop labor-intensive Identification of appropriate opportunities

39 Government Decree 105/2015 (IV. 23) on classification of beneficiary communities and the conditions of classification.

72 agricultural production was started in late 2009 when the for employment and income support in line community joined the “Sorsfordító-Sorsformáló” (“Shaping with local conditions, continuous social and Transforming Destinies“) program of the Southern work, and the establishment of elements Transdanubia Regional Employment Center, which and institutions permanently remaining provides training and employment.40 Within the scope of within the scope of projects may together the program, 10 people could produce vegetables and yield sustainable results. herbs for the kitchen of the local government. Thus, the results of the program were twofold: employment of 10 For what communities may this experience be of interest? Villages and small towns persons and saving nearly 1 million HUF in expenditures with their own institutions struggling with for the indebted local government. extreme poverty. In 2010, the community contacted the Maltese Charity Organization. This initially involved the exchange of Who can be contacted for further information? Károlyné Dobos, mayor; professional experience and later the provision of permanent social work and the operation of a Nándor Németh, professional manager kindergarten and a school.

The LEP addresses the issue of extreme poverty in detail, and supports it with data.

Activities

In half a decade, this labor-intensive agricultural production has grown from saving money for a debt- ridden local government to forming a local economic development program.

The local economic development program was built in the following steps:

2011

 Following the results of the “Sorsfordító-Sorsformáló“ (“Shaping and Transforming Destinies“) program, the subregion got involved in the initial pilot public works program. Participation of the subregion (Dombóvár subregion) was initiated by the community leadership. In subsequent years, more and more people were involved in public works, out of which labor-intensive agricultural production provides employment for about 30 people. The area used to grow vegetables has gradually increased to 15 hectares.  Gyulaj joined a project managed by the Maltese Charity Organization linking developments in eight different segregated communities, under the support of the Open Society Institute of Budapest. This made diverse exchanges of experience possible.41

40 See http://www.ddrmk.hu/index.php?id=20&subid=0&parent=2. 41 See http://www.gyulaj.hu/index.php/falufejlesztes/43-kirekesztett-kozossegek-terepszemleletu-tamogatasa.

73 2012

 A subregional ESF project was initiated that combines the instruments of social work, community development, and regional development (SROP 5.1.3).42 The participation of a subregion (with the communities of Tamási subregion) was initiated by the community’s leadership in 2009, when the tender was announced.  Farmyard animal husbandry was started by breeding rabbits, under the support of the Ministry for Rural Development (Vidékfejlesztési Minisztérium) and the Ministry of National Economy (Nemzetgazdasági Minisztérium)(“Nyúl-unk a munkáért”—“Grabbing work“).43

2013

 Farmyard animal husbandry was complemented with pig farming.  An ESF project was launched with complex educational, employment, health, and community development activities (SROP 5.3.6).44 Within the scope of the project, continuous social work could be provided, along with the establishment of a community center and a service point.  The state took over the local government’s debt, which freed the community from a heavy burden and increased opportunities for development.

2014

 A new targeted ESF project was launched to develop employment (SROP 1.4.3).45 The local government, along with specialists related to the community and the Maltese Charity Organization, established a social cooperative (Hetedhét Határ (Boundless) Social Cooperative).  One coworker of the Maltese Charity Organization has moved to Gyulaj. The latter manages ESF projects, the community center, and does social work, too.

2015

 Within the scope of an employment ESF project, a pig farming plant was built, along with a meat plant, a meat shop, and a pickling plant, taking over farmyard processing activities thus far.46 In this way, the opportunity was created on the one hand to increase the level of processing and thereby reduce seasonality; and on the other hand, to enable sales not only for the local kitchen but for external markets, as well. According to this concept, public works and farmyard animal husbandry can ensure the production of raw materials, while the relevant social cooperative performs processing.  The Maltese Charity Organization has taken over the operation of the school and the kindergarten. In essence, these decisions were delegated back to Gyulaj, and technical and financial management was returned to an organization committed to social projects.

42 See http://palyazat.gov.hu/doc/1892. 43 See http://www.gyulaj.hu/index.php/falufejlesztes/42-qnyul-unk-a-munkaertq. 44 See http://palyazat.gov.hu/doc/3367. 45 See http://palyazat.gov.hu/doc/3540. 46 See http://www.gyulaj.hu/index.php/megnyitottunk.

74

Results

At the peak of activity, nearly 100 people were involved in public works per year, partly in agricultural production and partly in other activities (such as maintaining public spaces). By means of rotation, the number of those receiving income from public works for at least one period is more than half of the village population.

The labor-intensive agricultural production provides employment for about 30 people.

All programs and projects included permanent elements and institutions (public works program: instruments; ESF project for 2013: community center and service point; ESF project for 2014: pig breeding farm meat plant, pickling plant), which make one-time project intervention sustainable.

Due to the efforts of social cooperatives and social work, farmyard animal husbandry and plant production increased, which is an important way to supplement income. The emphasis of social work could be gradually transferred from handling crisis situations to prevention.

Using the vegetables, meat, and wood chips produced by the program helps save nearly 9 million HUF for the local government. Thus, nearly 10 percent of the public work costs are utilized twice.

Experiences

Appropriate capacities are necessary to determine the direction and launching of local economic developments, as well as continuous innovations. In Gyulaj, this was primarily ensured by a mayor with proper husbandry skills and professionals working as volunteers on account of the Gyulajért Alapítvány (Foundation for Gyulaj). The widespread network of relationships brought by the Maltese Charity Organization was also important.

The role of continuous social work (“presence“) goes far beyond the handling of individual and family crises. It reinforces constant communication with people, guarantees basic prerequisites of developments, builds trust, and encourages long-term thinking. It helps identify problems and opportunities for improvement. It helps utilize income-support opportunities related to developments (such as farmyard animal husbandry and plant production expansion).

The sustainability of developments mostly based on projects can only be guaranteed by highly careful and conscious project planning. The first requirement is that continuous operation of earlier developments must be taken into account in all projects. The second is that the creation of permanent elements and institutions should be considered (such as tools, community center and service points, a pig breeding farm, a meat plant, and a pickling plant). But only such developments can be launched that specifically reduce the expenditures of local governments instead of increasing them, either by offering the opportunity to access normative budgetary support or by producing value (for example, using the vegetables and meat or wood chips produced). Even during the planning stage, it is important to think through and determine the anticipated owner of the permanent elements and institutions created.

75 The different objectives (reducing extreme poverty, improving the social inclusion of Roma, stabilizing the financial management of the relevant local government) and developments should be handled in a single system in professional and financial terms. Each development should rely on its own instruments to contribute to all objectives. People and organizations participating in developments must work together on a daily basis.

76 Social Economy in Katymár

poor, people living target group: children women elderly Roma with disabilities

education- social care field: health care employment housing training

Employment (social economy) in Katymár

Municipal efforts to harmonise public work and EU resources

Background

Katymár with a population of 2,100 people is Main data situated in the district of Bácsalmás, and is among the 36 settlements being in worst situation and to County: Bács-Kiskun county be developed by complex programmes47. Based on Region: Southern Great Plain the indicators measuring the social-economic and District: Bácsalmás infrastructure development of the areas it is the twentieth least developed district in the country. The aim of the activities: to enable the The situation of the settlement situated near the disadvantaged, permanently unemployed Serbian border is like those of the peripheries: high families to earn an income – to knowingly unemployment, poor transportation, extreme build the resources available for the poverty. There is no significant rate of Roma population in Katymár, it is under 10 percent. One municipality on each other of the biggest problems of the settlement and the Period of implementation: 2005 – district is unemployment. The employment and Types of resources used: Social Land labour market situation of the district of Bácsalmás Programme (since 2005), ‘Jointly for the is by far the worst among the districts of Bács- Integration of People Living in Extreme Kiskun county. The municipality of Katymár, in Poverty in the Small Region of Bácsalmás’ addition to various social supports and services (SoROP 5.1.3), Programme for the Transit and public work, tries to improve the situation of Employment of Permanently Unemployed those living in poverty with several projects. Its People in Small Regions (SoROP 5.1.1), 'A activity is unique because the different Good Chance for Development’ (SoROP 5.1.1), instruments and interventions targeting the Bácsflóra Production School (SoROP 1.4.3) and disadvantaged social groups have been operating in a complementary way, and built on each other, Start Work Programme for nearly ten years. The municipal development Most important experiences: a complex focuses on agricultural production, processing and support system can be operated by building individual farming. The aim is to develop a different resources on each other (but cannot sustainable system by joining public work, Social be sustained without support) Land Programme, farming programmes financed What kind of settlements can be interested in by tender resources and trainings. the experiences? Settlements lacking

47 Gov. Decree 105/2015. (IV. 23.)

77 employment and with agricultural production facilities

Who can share the experiences? Endre Pál, Mayor of Katymár Activities

The Municipality of Katymár has been engaged in a rather active tender activity for the past 10 years. The first programmes targeting human development were launched in the settlement in 2005, the ‘Sure Start Children Houses’ and the Social Land Programme linked to it were launched as pilot programmes in six settlements in the country. These currently operating programmes gave the basis for the municipality employment system that has been established in the settlement by now. The direction of the development implemented in the past ten years has always been affected by the type of the available resources, and the local economic environment has also undergone significant changes, but the conscious strategy of the municipality can continuously be observed. The biggest employer of the settlement was the local agricultural company until 2008, where nearly one hundred employees worked until the beginning of the crisis; however, today this number is hardly twenty. The lack of workplaces has significantly increased the number of those working abroad, just like in other similar settlements. It is estimated that about 150 people regularly work abroad, the employers’ target countries are Germany and Austria. Those working abroad are mostly women, who work as domestic carers for families with elderly people in shifts of four to six weeks. The jobs with a potential income between net € 900 and 1,500 are characteristically done by those who would like to provide their previous living standards and not by the poorest people. The majority of those working abroad do not move from the settlement, they continuously return. Employment is mediated by agents, and there is generally no need for vocational qualifications, but the municipality, and later also a local civil organisation have been providing the opportunity for local women and for women living in the surrounding area to obtain the international certificate in domestic care following a short training. During the period of the 2008 crisis, besides the nearly total lack of local employment, a new phenomenon appeared in the village, against which the municipality was inert for a long time. The poorest families started to demolish the empty and neglected houses in the settlement. A part of the demolished material was used for heating, and the other part was sold. Finally, after a long struggle the municipality stopped this process, and even purchased many of the neglected properties. Poverty and helplessness had never been present before in the settlement, the new situation was a continuous challenge the leaders of the settlement had to face. Now the mayor of Katymár is talking about a model consisting of more pillars, which tries to handle the problems of the disadvantaged families in a complex way. The model combines the supports provided on the bases of the Social Act and local ordinances, the various support schemes (Sure Start, Social Land Programme, SoROP programmes targeting community

78 development), public work and other initiatives targeting employment, and builds them upon each other. The municipal development focuses on the promotion of agricultural production, processing and individual farming. In the first period mostly those parents participated in the Social Land Programme having continued for ten years who were the target groups of the Sure Start Children Houses. The families being in worst situation could be reached through the services of the children houses, and built on the trust created thereby they have been involved in the Social Land Programme. Within the framework of the land programme the families are given seed packets and occasionally pets for their kitchen gardening; they are continuously advised on their use and checked how they use them. Initially 16-17 families participated in the programme, and then this number increased to 30 on an annual basis. The municipality has been participating in the Start Work Programme since 2012; therefore it cannot apply for agricultural activity within the Social Land Programme. The kitchen garden programme with an annual budget of about HUF 1 million continues, and the resource for the tender is obtained by the Roma Minority Self-Government. Following the continuous expansion of the public work programmes the Start Work Programme was also launched in the settlement in 2012, which a little overshadowed the previous initiatives. Within the framework of the programme, the employment of about 100 people is provided from the support of the order of HUF 80 million annually. The EU projects are also important elements of the employment system, which primarily try to help the disadvantaged groups and families in the settlement with various tools. The aim basically is to organise trainings and employment – which are related to each other – and to enable the families to have extra income and reduce their expenditure.

One of the most highlighted elements of the ‘Extreme Poverty Programme (SoROP 5.1.3) implemented by the governance of the Municipality of Katymár in seven settlements between 2012 and 2014 was the ‘Farmer Programme’. The primary aim here was also to create the self- sustaining ability of families living in poverty and reduce the expenditure of households. 76 families were involved in the overall project and 70 families in the Farmer Programme with the help of local mentors. The opportunity was not announced because the aim was that – as advised by the mentors – the families most in need should be involved. The majority of the families addressed used the opportunity. Within the programme element the participants were given seeds, seedlings (grown within the framework of the Start Work Programme) and garden tools, the latter providing the strongest motivation for many of them. The social mentors continuously kept contact with the families during the period of the project so that they could help them if it was necessary. In bigger settlements (where the number of the families involved is also higher) ‘leading farmers’ were appointed, who could help the others by sharing their experiences and giving advice. The families participating in the Farmer Programme regularly participated in the community meetings and ‘farmers’ meetings’ as well, where horticulture and the results of gardening were frequent topics. At the first ‘farmers’ meeting’ they organised an exhibition by using the photo documentation, and within the framework of a ‘garden beauty contest’ they awarded the families by settlements, which contributed a lot to keeping up the

79 participants’ motivation. The newest elements of the Katymár system are the social shop and pasta mill launched in September 2014, which are operated by Katymár Produkt Kft. owned one hundred percent by the municipality. In addition to the support of HUF twice 3 million provided by the Social Land Programme, public work and EU supports were also added to the investment of HUF 20 million necessary for the launching of the social shop. In the shop operating as a traditional grocer’s shop 20 percent margin is applied instead of the average 40 percent and it is of primary importance that the goods shall be supplied by local producers. In addition to the products produced in the gardens, the products produced by the municipality within the framework of the Public Work Programme are also considered local products. Currently the daily turnover of the shop is between HUF 180 and 190 thousand. For the time being, the rate of local products purchased from the population is very low, and the municipality sold its own products in a value of around HUF 1 million in the first year. Currently seven public workers (two of them obtained the shop assistant qualification within the framework of SoROP) work in the shop. The pasta mill has not produced for the market yet; the products are taken to the kitchen of the settlement and put in the packets provided for the pensioners. The mill appropriate for producing more quintals of pasta daily, is operating only intermittently due to the lack of licences necessary for selling products on the market. The licences have not been obtained nor has the production started yet due to the lack of capacity. Agricultural activities mainly carried out within the Start Work Programme are done in a field of about 35 acres. This year chili peppers have been grown in an area of 3 acres and arable crops in the rest of the land. Arable cultivation is mostly carried out by their own machines; they only have to pay for harvest and spraying. In addition to the arable land, in an inland of 2.3 acres and on parcels owned by the municipality vegetables are grown in polytunnels built within the framework of SoROP programmes. A significant part of the products produced locally is taken to the settlement’s kitchen with a capacity of 220 portions, and a part of the products is processed within the framework of public work (making jam and acidification). ‘Efforts for self-sustaining and short distribution channels as the tools for the reduction of extreme poverty’

It is the first time that the municipality started to grow chili peppers, which need a lot of handwork, in an area of 3 acres. The selling of peppers has been ensured in advance through an agreement concluded with a purchaser. At the time of picking peppers 40 people worked in the area of the municipality, which shows that there is a demand for handwork in growing peppers; it caused quite a lot of problems to the 6-7 farmers in the surrounding area, who are also growing peppers (on at least 1 acre). The houses in Katymár characteristically have kitchen gardens of 1,500-2,000 square metres. As far as the municipality is concerned a household can have an annual income of HUF 300,000-400,000 by growing well-selected intense plants in an area of this size. This year, in addition to the parcels of the municipality, some families have been made to grow peppers tentatively, in a quasi-integrator system. The made-up

80 construction is simple: the municipality provides the seeds and the plant protection products if necessary, ensures marketing, and then deducts the costs of the above from the price of the peppers. In spring the municipality advertised the opportunity in many local events, primarily among the public workers; finally four families started growing peppers out of the 8-10 who were interested.

Results

- The Farmer Programme implemented within the framework of the ‘Extreme Poverty’ Programme – due to local background, experiences and connections – is considered successful by those who have implemented it48. It is clear to everybody that only the kitchen garden programmes cannot solve the situation of those living in extreme poverty; however, they help achieve many aims of the settlement. One of the most important ones is the continuous strengthening and improvement of agricultural production and individual farming (as a central trend). The other one is the awareness- raising and motivating of the families so that they make effort to improve their living standard and use their own resources (since there is no other opportunity). - In the settlement the annual labour cost of the agricultural programme as a major part of public work has been higher than HUF 60 million (in 2013 and 2014 higher than HUF 80 million) since 2012. The total cost of the programme included other expenditure is even higher than that. In 2015 revenue of HUF 16-17 million is expected, the majority part of which is arable farming with minimal handwork. On market basis this revenue would enable the employment of maximum 7-8 people. - In order to ensure public food service the municipality purchases ingredients for HUF 18 million annually. Out of this the citizens of Katymár currently produce and sell products to the kitchen in a value of HUF 4-5 million. The municipality aims to at least double this amount. - Based on the local ordinance of the municipality every citizen over the age of 62 and under the age of 14 (about 500+250 persons) are given benefit in kind in a value of HUF 2,500 annually. The purchased items in the packages are only sugar, flour and Santa Claus packages, all the other items are their own products. Through the packages the municipality can book an annual amount of HUF 2 million as social assistance provided from their own resources. - The modernisation of heating implemented within the framework of public work resulted in significant cost saving. Annually the municipality saves about HUF 5 million due to the biomass boilers installed in public institutions. Fuel is produced from vegetable wastes with chippers by public workers. Compared to the previous heating

48 Zsombor Farkas –Miklós Kóródi –Eszter Kósa: Overview of the developments targeting the social inclusion of those living in poverty (Autonómia Alapítvány 2014) - http://melyszegenyseg.hu/dokumentumok/dokumentumtar_tartalma/TAMOP513_szoc_modsz ertani_edok.pdf

81 system this technology results in about 60% saving; in addition the municipality sells chips in a value of HUF 1.5 million to KLIK (Klebelsberg Institution Maintenance Centre). - According to the calculations of the municipality 8-10 percent of those working in the public work programme return to the primary labour market, which can probably be attributed to the huge number of local training (about 250 people have participated in some kind of training in the past four years) . - Compared to the costs, however, the revenue of the municipality gained through public work is very low, but this ‘profit’ is inevitable for the operation and development of the local institutional system. - It is a very important direct effect of the EU programmes that they enable the retention of skilled young employees with a higher school qualification. However, it is a frequent problem that the skilled workers trained by the municipality leave the settlement in the periods without projects.

Experiences

The mayor considers public work and the EU programmes as a supplement thereof the site of practical training, a most important function of which is to teach individual farming. Further elements of the local system (social shop, network of integrators, kitchen of the municipality) provide opportunities for those who have already started some kind of individual farming. It is also important that those who are unable to engage in individual farming and produce marketable products are not excluded from the programmes (year by year, they have the opportunity to get seed packets within the framework of the Social Land Programme). One of the most important issues is sustainability. The ‘model’ developed in Katymár (public work, Social Land Programme, connecting farming programmes with trainings, the social shop of the municipality and involving market actors) provide for the establishment of sustainability, at the same time, the continuous central and EU supports are necessary for the operations of the intended structure. The municipality, with its limited capacity, is continuously searching the marketability of the products produced in the course of public work. One way of this could be the trade between municipalities being close to each other. This model is also ambitioned by the MI, but it is not an operational system yet. ‘The mayors’ way of thinking is improving. In the first eight years I could not force the colleagues to calculate how many portions of food are consumed in our area. I still do not have this data, but by now we have achieved that one or two of them say that we shall talk about it, that you purchase this from me and I purchase that from you.’ – said the mayor of Katymár.

It is important to highlight that the municipality would not like to put the local farmers at a disadvantage by the agricultural programmes initiated by the municipality. Therefore they continuously consult with the large farmers producing peppers, so that despite the mass public work everybody shall be able to employ enough day labourers. By the flexible organisation of public work it can also be achieved that nobody fails to earn the extra income, which is very important for them.

82

It is an important question whether the municipality has the capacity for the coordination of such a diverse employment programme. The operations manager of the public work (besides other maintenance tasks), who is originally a skilled carpenter, is the leader of the municipality’s maintenance workshop employing three persons. One of the representatives of the municipality is an agricultural entrepreneur, who conducts arable farming as a volunteer. As for the mayor, the agricultural section would not necessarily, but the shop of the municipality and the pasta mill would probably operate in a much more effective way if they were managed by qualified management. Compared to other settlements being in similar situation, in Katymár less and less external support is used for the planning and implementation of the projects. In the past years a staff of local professionals has been formed who cooperate, see the problems in their complexity and try to handle them in this way. However, the periods without projects do not enable the operation of such a staff.

Other programmes connected to the employment programmes have important roles in the activation of disadvantaged families. The personal development trainings prior to the trainings, continuous mentoring and different community activities are inevitable for the activation of disadvantaged people.

83 Public work and EU Funds in Karcsa

people living target group: the poor, Roma children women elderly with disabilities

field: healthcare education- employment housing social care training

Public work and EU funds

Programmes generating income involving disadvantaged families Background Main data Karcsa is south of Sátoraljaújhely, close to the Slovakian border, with a population of some County: Borsod-Abaúj-Zemplén County 2,000, and it belongs to the most Region: Northern Hungary disadvantaged district of the country, Cigánd. District: Cigánd The central settlement and only town of the district in Bodrogköz is Cigánd with some Aim of the activity: to enable disadvantaged 3,000 residents. Risk of Poverty (HAS IRS) of families to receive income the settlements in the district is almost without exception high or very high. Timeframe of the implementation: 2012 - The rate of the Roma population exceeds 20% 2014 in Karcsa. The majority of gypsy families, about 300 people, live in a segregated Types of funds used: ‘Comprehensive settlement, Becsked, three kilometres from Intervention in Bodrogköz Subregion to the centre of the settlement. The Improve the Living Conditions and Facilitate infrastructure of the segregated settlement is Social Integration of those in Extreme Poverty’ worse than that of the village, there are no (SOROP-5.1.3-09/2-2010-0041), Start Work asphalt roads or sewage facilities. Within the Programme framework of the programme ‘Chances for Children’, a community house has been The most important experience: Supporting operating for two years. kitchen gardening cannot solely solve the The number of jobs available in the region is problems of the poorest families but together very low, public work programmes offered by with other programmes and services it may local governments are almost the only become an efficient incentive opportunity for people with low qualifications. What settlements may the experience be The programme ‘Comprehensive Intervention interesting for? in Bodrogköz Subregion to Improve the Living Settlements with low employment rate but Conditions and Facilitate Social Integration of suitable for agricultural production those in Extreme Poverty’ took place from

84 2012 to 2014. The project was implemented in Who can share the experience? an action area involving nine settlements, the János Dakos Jr. programme manager (SOROP main tenderer was the local government of 5.1.3) Karcsa. One of the key elements of the programme primarily aiming to develop community was to support kitchen gardening, which was tightly linked to the local government public work programme.

Activities

The priorities of the comprehensive programme implemented between 2012 and 2014 were to develop communities, increase capacity of those in extreme poverty and improve the level of social care. Six settlement mentors were keeping contact with the almost 80 families involved in the project, their work was coordinated by two community development workers. The scope of activity of the mentors was rather complex, they primarily supported the work of family service and child welfare experts working in basic social services. Besides different social events (clubs, topical group sessions), the key element of the programme was to promote self- sustainability of those in extreme poverty. The aim of this activity was defined in the tender as follows: “improving abilities for and skills in self-sustainability, increasing their entrepreneurial drive; promoting healthy lifestyle by producing their own local (not delivered and packed) plants containing little chemicals and producing healthier food out of them; creating co-operations, self-help networks, which may be the bases for establishing social associations”. Agriculture is still one of the sectors that the residents try to make a living on, income from seasonal agricultural work has a very significant role. However, many do not cultivate kitchen gardens of houses. The programme primarily wanted to influence this by providing seed packs and hand tools as means of support, though it was obvious from the beginning that these themselves do not account for real help. “If the income of five out of 76 families is supplemented, it is a good result.” – stated the manager of the programme. The families involved in farming have totally different experience in gardening. Besides motivating the families, the social mentors hired for the programme were tracking the cultivation of gardens, preparing photographic documentation and supervising the processes. The families involved participated in trainings in farming where they could learn about the following topics: (1) the basics of growing plants; (2) food preservation, processing and storage; (3) producing and processing spices and herbs; (4) the basics of entrepreneurship (sale in the market, becoming a licenced traditional small-scale producer). Trainings were mostly organised on Saturdays, as on weekdays the families involved usually carried out public work. Seed packs were calculated for 150 square meters gardens, which can supply vegetables to a family of four or five members. The families involved received support for their gardens in two consecutive years. According to the original plans, the participants could have sold their grown but not used vegetables in the local market, though it soon turned out to be an unrealistic idea. Start Work Programme and ‘Extreme Poverty’ programme were linked in the settlement from the beginning. The families involved took some advantage during public work – there were public workers in each family from Karcsa participating in the project. According to those implementing the project, the theoretical training of the programme could connect to the “practice” of public work this way. These skills and knowledge can also be exploited by the participants in their own gardens. In practice, public work was an efficient tool for motivating and activating families participating in ‘Extreme Poverty’

85 programme. Vice versa: the programme functioned as a filter for entering the public work scheme.49. Currently Start Work Programme has three main elements in Karcsa: (1) agricultural section, (2) maintenance of settlements, improving agricultural roads, (3) clothing factory. This year the number of public workers is constantly above 200, 40 out of whom work in the clothing factory, the rest do maintenance, cleaning and agricultural work depending on the season. Within the framework of the agricultural programme, they cultivate arable land, produce vegetables and flowers in pholytunnels, keep animals (poultry, pigs, pigeons). The activities are planned to be expanded by breeding quails and emus and establishing a pasta factory.

Results

- Within the framework of ‘Extreme Poverty’ programme, the farming element itself did not manage to significantly increase the income or improve the living conditions of poor families. Despite several limitations of the initiative, those implementing the programme considered it important, as a central element of the programme, since it served the aims set locally well (motivation, linking to Start Work Programme, incentives etc.) Cultivating a previously weedy garden proved to be a sense of achievement for everybody. It was also a significant result that a high ratio of families participated in the trainings of the programme, the seed packs and the constant mentor presence proved to be suitable motivational tools. The difficulties of kitchen gardening can be demonstrated by the following cite: “It is the task of the mentors to make people really cultivate their land. There are a lot of questions that we do not know the answer to, for example: you, the garden should be ploughed. How? Currently it means it has to be shovelled. Are people without water on their estate going to water from public wells? It is also a question for us. The process has to be constantly monitored. Well, some received seeds and tools, but how they will water, how constant watering from public wells will affect people living in the neighbourhood…, are problems which we face in practice.” (programme manager, Karcsa)

- After closing the ‘Extreme Poverty’ programme kitchen gardening support finished in the settlement, which was obviously due to the lack of funds. Furthermore, the new leaders of the settlement managed to involve everybody in public work by constantly expanding it, thus the supplementary programme as an entry or motivational tool became unnecessary. The strategy of the leadership is different currently, they regulate the conditions of public work in an ordinance; one of the requirements is to cultivate kitchen gardens.

- Currently more than 220 people are involved in different public work programmes in the settlement. In a consortium together with nine other local governments, within the framework of a unique programme, 40 workers are manufacturing uniforms for public workers (they were ordered to manufacture 62,000 uniforms altogether) in the clothing factory, earlier they also made uniforms for penitentiaries. The annual gross revenue of

49 Zsombor Farkas - Miklós Kóródi - Eszter Kósa: Review of Developments Aiming at Social Integration of People in Poverty (Autonómia Alapítvány 2014) - http://melyszegenyseg.hu/dokumentumok/dokumentumtar_tartalma/TAMOP513_szoc_modszertani_edok.pdf

86 the clothing factory is HUF 13-14 million.

- The local government have bought several real estates in the village in the last years. On these estates they established pholytunnels and buildings suitable for keeping chickens, pigeons and pigs. Currently, they are keeping 200 pieces of poultry, 8 sows, 17 rearing pigs and 100 pairs of pigeons, they are planning to purchase 1,500 quails and 300 emus. As a result of their agricultural activity, they produced vegetables and meat in the value of about HUF 5 million for their own households this year. In the canteen, originally established for 200 people, they cook for 500 people currently, the annual cost of raw materials is about HUF 18 million.

Experience

- Supporting kitchen gardening cannot solely solve the problems of the poorest families but together with other programmes and services it may become an efficient motivational tool. - The vegetables produced in the kitchen gardens may mean some savings for the family budgets, but the sale of products in the market is not a real option in the majority of the cases. - Personal support and consultancy are extremely important for families who have not cultivated their kitchen garden for a long time or ever in their lives. - The sustainability of kitchen garden programme was ambiguous from the beginning. However, those implementing the project had firm ideas about linking EU tenders and public work. Through the programme it was proved that the service packages most suitable for the local demands and needs can be created by linking different funds. - Mass public work causes serious problems here at the time of seasonal work just like in other agricultural areas. The flexibility of local governments organising public work is a key element from the point of view of employees and employers as well.

Kiútprogram: Income generation in Szabolcs-Szatmár-Bereg County

people living Target group: poor, Roma children women elderly with other disabilities

education Specialization: health care employment housing social services other and training

Cucumber growing in Szabolcs

An income-generating program that focused on the inclusion of disadvantaged, mainly Roma families—experience of the Kiút (Way Out)

87 program

Background

Szabolcs-Szatmár-Bereg County has one of the Quick facts highest unemployment rates in the country. Nine County: The settlements of Szabolcs-Szatmár- of its 13 districts belong to the country’s 36 most Bereg County disadvantaged regions, which need help from 50 complex programs. Region: North Great Plain

Cucumber growing goes back decades in some Objective: To provide an income-generating parts of the county. The small gardens that belong activity to disadvantaged (mainly Roma) families to family houses play a significant role in cucumber by supporting them as primary producers production. In several settlements, cucumber growing has long been the primary source of Period of implementation: 2012–2015 income both for Roma and non-Roma citizens. Amount and type of funds used: In the framework Kiútprogram has made an attempt to also involve of the Kiútprogram in 2015, 28.5 million HUF in the program families from some of the county’s worth of tools and materials were allocated to the predominantly Roma settlements, who would disadvantaged families. The program is financed 52 otherwise be unable to take the initial steps by from private resources. themselves. Most important experiences: The disadvantaged families that did not previously pursue The original aim of the Kiútprogram, in its own independent farming activities can become words, is to “enable people living in deep successfully involved in the income-generating poverty—primarily Roma—to become self- program. employed by providing for them social support, financial services, and information, so that they For what settlements can the experiences be useful? Settlements with poor employment are able to improve their own social situation and opportunities that have kitchen garden areas create a livelihood for themselves and their suitable for farming (at least 600 sq. m each). families.”51 The program’s key objective is to set up sustainable enterprises that are able to Who can be contacted for further information? circulate in the local economy, and its most Sárkány Csilla technical leader, Kiútprogram important financial service is the self-employment Közhasznú Nonprofit Zrt. promoting microloan.

The Szabolcs cucumber-growing program started as a pilot project in 2012, and in the meantime

50 Government Decree No. 105/2015 (IV. 23.) on the classification of the beneficiary settlements and on the conditions of classification. 51 See http://www.kiutprogram.hu/index.php/hu/mi-a-kiutprogram/vizionk. 52 Kiútprogram Nonprofit Zrt. has been operating exclusively from Hungarian private resources since October 2012; it uses neither EU nor government funding. All data on its operation are public.

88 some 200 (mainly Roma) families have joined it in some way or another.

Activities

The provision of group microloans aimed at promoting self-employment under the Kiútprogram—and the connected services (training, consulting, mentoring)—started in 2010 under the framework of an EU-financed pilot program. Under the two-year program, which rested on intensive field work, the development and support of various enterprising activities were implemented in a disadvantaged environment, mainly in the country’s eastern region. Despite several less successful attempts, cucumber growing in Szabolcs county was clearly a success story. After closing the pilot, the program now works with national private resources and has exclusively cucumber-growing clients.

Cucumber growing is performed under an integrator system. The integrator provides the plants and the chemicals, the price of which it gradually deducts from the price of the cucumbers. Growing can be started in an average sized kitchen garden, and the grower needs a support and watering system, a drilled well, a pump, and a spraying apparatus.

In 2012 the Kiútprogram joined this integrated production process. The aim was to involve in the production disadvantaged families that were not previously able to purchase the necessary tools and seeds with their own resources, or were not considered creditworthy by the integrators. Under the program’s framework:

 the families involved were granted an easy-term microloan (of 150,000–200,000 HUF, on average), which enabled them to buy the necessary equipment;

 Kiút mediated between the families wishing to engage in farming and the integrators during contracting (in many cases, Kiút’s presence was required to persuade an integrator even to enter into a contract with a would-be farmer);

 Kiút provided the accountant and the contributions payable by the enterprises, and the local officers of the program continuously helped the growers perform their administrative tasks.

The most important experience of the first three years was that the growers were far too dependent on the integrators. In many cases they only received the necessary spraying chemicals—with delay—or the expert provided by the integrator came too late to diagnose what disease had attacked the plants (the cucumber is a rather vulnerable plant, and belated spraying may destroy a crop at the start of the season). It was also problematic that the growers did not receive any money for their produce until the full price of the materials granted on loan was deducted from its price.

In 2015, in an effort to reduce the growers’ dependence, Kiútprogram Nonprofit Zrt. as a social enterprise joined the program in the capacity of integrator. Kiútprogram now itself provides the contracted families with the tools and materials necessary to start production, and it also purchases the cucumbers. The organization does not lend money, only equipment. The growers get two years to repay

89 the cost of the growing equipment, and the price of the cucumber-farming materials will be deducted from the price of the ready produce, but at a much slower pace than before (at any one time, a maximum of half the amount due to the growers for the delivered cucumbers will be retained as repayment of the loan). In ten settlements, the take-over points (places where the integrator takes possession of the cucumbers) have been set up in the courtyards of the families involved in the program. Five local mentors are in charge of procuring the farming equipment, administrating the purchase, making payments, and handling other farming administration matters. A plant protection expert gives the growers advice about the plants.

2015, 73 families in 12 settlements grew cucumbers under the Kiút integrator system, on nearly 50,000 linear meters (with a minimum of 300 linear meters per family); the value of the cucumber crop produced reached a combined 40 million HUF. In addition, 53 growers had never grown cucumbers before. In all, 10.5 million HUF worth of equipment was loaned for two years, while the value of the growing materials (plants, chemicals, and so on) exceeded 18 million HUF. The growers have already repaid 80 percent of the amount. The long-term commodity loan means a 5,000–10,000 HUF monthly expenditure for the growers. According to the program’s technical leader, Kiút’s role as an integrator was clearly a success. Thanks to the new system, the program participants made more income than in previous years.

There are, however, obstacles that the program is unable to manage. Cucumber growing is a labor- intensive activity; its season lasts from April–September. During the season, every hand is needed on the family plantation, so this activity can hardly be done alongside other activities. In several settlements, to whatever extent possible the municipalities organize public work—which is practically the only work opportunity—so it is reconciled with family farming activities. However, in one of the participating settlements, exactly the opposite happened: the public works program organized by the municipality actually put an end to the Kiút program activities. In this settlement, few families had participated in the program; those remaining members who were not involved in public works activities were unable to make up for the work of the family members lost to the public works program.

Results

Since 2012, some 200 disadvantaged (mainly Roma) families participated in the cucumber-growing program. According to the Kiútprogram’s calculations, if a family already has the fundamental growing equipment, with each 500 HUF per linear meter additional investment, they can earn 1,000–5,000 HUF. Essentially two factors determine the amount: weather and skill. According to the experiences, there can be as much as 500 HUF per linear meter difference between the incomes of the families farming under similar conditions, to the advantage of the more experienced farmers with better skills.

Some 40 percent of the families growing cucumbers under the Kiútprogram in 2015 had a monthly income of under 200,000 HUF; slightly over 30 percent had 200,000–250,000 HUF; and 16 percent above 500,000 HUF. It is important to note, however, that more than half of the families involved had never before grown cucumbers. The income figures could be slightly higher than shown here; these only reflect the cucumbers sold under the program. However, it follows from their magnitude that for those

90 families that only farmed in their own garden and did not involve any extra labor outside the family, cucumber growing was an important source of income, though it failed to provide for the entire family’s subsistence. For the disadvantaged families, the income—which is concentrated at the end of summer— is sufficient for start-of-school spending and to survive the winter. Even in the case of those families that farm a bigger area and have more income, it is rare that they are able to build reserves for the next farming season, so the integrator loans them the plants and the chemicals from year to year.

Besides the incomes, the repayment rate of the loans must be mentioned, even though this is not the program’s primary success criterion. In the first year of the program the repayment rate reached 80 percent, but in the subsequent two years it barely exceeded 30 percent. There are several reasons for the significant difference (bad weather, more inexperienced growers), but the most important is that the one-year term of the loans was reduced by half in the second and the third years, on the request of the lending institution.

In addition to the quantifiable results, it is clearly a success of the program that the cucumber-growing families’ success and prestige, and non-Roma citizens’ opinion of them (after their initial doubts) improved considerably in their settlement. The program’s field workers report that the confidence of the successful grower families significantly increased, and, as one worker put it, the “world opened up for them.” The successful farming families serve as examples for the others, which is also reflected in the fact that interest in the program grows from year to year.53

Experiences

One of the most important experiences to come out of the program is that with appropriate technical and financial assistance, families living in deep poverty are able to pursue an independent farming activity by which they can earn rather good income. The money that can be produced in a kitchen garden–sized area is important supplemental income, though cucumber growing in such dimensions cannot provide for an entire family or replace regular employment.

Because of its relatively high profitability rate, cucumber growing is becoming increasingly attractive to the local municipalities. Several settlements have already started to grow cucumbers under the framework of the public works program, with the involvement of the integrators. However, cucumbers grown by public workers on municipality land are pushing down purchase prices, which threatens the positions of the family farmers and the larger enterprises.

The full adaptation of the Kiútprogram model would obviously encounter many obstacles (lack of loans, marketable farm produce, and so on). Income-generating programs of similar structure could be organized in capital-poor environments, basically to produce highly labor-intensive products, but becoming an independent business enterprise—despite continuous support services—is still not a self- evident option. The success of this type of program is essentially determined by the selection of the

53 See Kiútprogram—Experiences of an employment and social microlending pilot program, at http://www.kiutprogram.hu/index.php/hu/dokumentumtar/category/15-szakmai-ismertetok-kutatasok.

91 participants, the quality of the support services, and, naturally, the marketability of the products.

92 Social rehabilitation and housing integration in Pécs

people living Target group: poor, Roma children women elderly with other disabilities

health education and social Specialization: employment housing other care training services

Housing Integration, PÉCS

Improved the situation of people who live in slums and moved 35 families to an integrated environment on the city’s northeastern edge

Background

Pécs is the largest city in the Southern Quick facts Transdanubia region, with attractive scientific and cultural life and a substantial coal mining history. District: Pécs Four former mining colonies are located at the County: Baranya edge of the Mecsek hillside town. From west to east: Pécsbánya, the adjacent Hősök tere (Heroes‘ Region: Southern Transdanubia Square), and György-telep (George Colony); István- akna (Stephen Mine); and Somogy-bánya (Somogy Population: 150,000 Mine) and Rücker-akna (Rücker Mine) paired. The Objectives: To reduce housing segregation in three share of public rental housing is significant in each colonies at the northeastern edge of Pécs, on the of the above. When the mining industry gradually one hand by improving the situation of those living deteriorated in the 1990s, those living in the in the relevant communities, and on the other by mining colonies lost their jobs and moved. As a relocating 35 families to an integrated environment. result, the share of low-skilled, unemployed, and Roma people increased and the colonies became Implementation date: 2011–2015 increasingly segregated. Another three segregated Amount and type of resources used: a total of communities can be found on the southern side of approx. 1.5 billion HUF; foundation: approx. 50 the city, along the railway. million HUF (MtM); ESF: 150 million HUF (SROP The four colonies are not uniform: Pécsbánya, 5.3.6); ERDF: 1.3 billion HUF (SIOP 3.2.3, DDOP Hősök tere (Heroes’ Square), and Somogy-bánya 2.1.4) (Somogy Mine) are largely traditional suburban, detached housing areas. Kórház utca (Hospital What are the most important experiences? With Street) and György-telep (George Colony) are appropriate preparation, cities can effectively areas characterized by crowded row houses in bad reduce housing segregation.

93 condition. The István-akna (István Mine) and the For what communities may this experience be of Rücker-akna (Rücker Mine) are isolated from the interest? Cities struggling with housing segregation. neighboring town areas and are surrounded by Who can be contacted for further information? forests. Katalin Kovacs, professional counselor, mayor’s There have been two earlier attempts to handle office; Katalin Csonkáné Utasi, program manager Maltese Charity Organization the colonies’ increasingly severe socioeconomic problems. One of them, which began in 2005 at the István-akna (István Mine) called the Lakmusz (Litmus) program, aimed to provide housing for young people leaving state foster care. Unfortunately, it became a spectacular failure after social work was discontinued.54 At the same location, it was hoped that large-scale real estate developments would come to fruition, but they were abandoned by 2008.55 The other attempt was implemented in 2008 at the György-telep (George Colony) primarily by the “jelenlét“ (“presence“) program of the Maltese Charity Organization, which was specifically based on long-term social work and yielded more sustainable results.56

The detailed and ambitious LEP, prepared in 2013, identified segregated communities as the primary problem pertaining to equal opportunity for those in extreme poverty and those who are Roma, and identified housing integration as a development opportunity.

Activities

Housing integration activities started in 2012, enabled by the fact that an amendment of an EU regulation had made it possible to use EU funds for housing. A single social urban rehabilitation program consisting of several projects was implemented.57

The municipality developed a multifaceted cooperation involving the Pécs group of the Maltese Charity

54 See http://www.bama.hu/baranya/kozelet/sajat-lakasukat-epitik-90502; see also http://www.bama.hu/baranya/kozelet/botranyos-lakmusz-program-tonkretett-lakasok-felszedett-parketta- 217384. 55 See http://www.bama.hu/baranya/kozelet/minden-mozdithatot-visznek-istvan-aknan-224265. 56 See http://www.maltai.hu/?action=program&programid=13. 57 See http://www.pecs.hu/tartalmak/Kuzdelem_a_szegenyseg_ellen_.

94 Organization, the Khetanipe Association for Roma Cooperation, and the university’s sociology department. A systematic project preparation process was launched. This concluded in a cooperation agreement with the United Nations Development Programme (UNDP) to moderate the process and provide methodological support. Competent “coaches” started to work at the relevant sites to mobilize local communities, strengthen their problem-solving capabilities, and lead local volunteer work in which they, for example, cleaned up littered public areas overgrown by bushes. Similarly, through programs organized for children and families, they “reoccupied” Hősök tere (Heroes’ Square), which had been taken over by prostitutes and drug traffickers. Coaches played an important role in mediating with local governments and in determining development needs that could be implemented without additional resources. A good example comes from one community in which children walking to the nearest bus stop had to run across the busy Route 66, which had no pedestrian crossing. This understandably bothered parents. When the local government and the transport company were made aware of this problem, they moved the bus stop so the bus could stop before turning on to the main road. The resources required for project preparation was provided by the Budapest Open Society Institute.

In the spring of 2012, a relevant tender opportunity with ESF resources became available to improve the education, employment, and health status of those living in segregated communities and for community development.58 A project aimed at the György-telep (George Colony) was developed, and the presence of the Maltese Charity Organization at this location provided ample basis for it. A year later, a related tender opportunity with ERDF resource became available to complement the previous tender with investment elements, such as housing refurbishment.59 Desegregation was possible but not required. A related project was developed targeting the same area. It involved renovating 24 housing units and moving five families to an integrated environment.

In the autumn of 2013, another relevant tender opportunity to develop housing integration models became available with ERDF resources (but only for the South Transdanubia region). 60 Specific desegregation requirements were imposed. Each project had to relocate 30 to 36 people to an integrated environment. Three projects targeted Pécsbánya, Hősök tere (Heroes’ Square), the Somogy-bánya (Somogy Mine), and the Rücker-akna (Rücker Mine) pair—the István-akna (Stephen mine) would have required more preparation. In all, 30 families were relocated to an integrated environment and 44 housing units were renovated.

During implementation, perhaps the most serious political/sustainability risk was that due to delays in tender evaluation, the project launch coincided with the fall 2014 campaign season for local government elections. On the one hand, public sentiment in the country was increasingly reluctant to accept efforts aimed at Roma integration, and many leaders were noticeably concerned about losing electoral support. On the other hand, local associations formed in the previous term by a coalition comprised of the governing party and the major NGO organizations ended up dissolving, and NGOs working on these projects became opposed to the government party. The city leadership consistently communicated about

58 See http://palyazat.gov.hu/doc/3367. 59 See http://palyazat.gov.hu/doc/4122. 60 See http://palyazat.gov.hu/doc/4249.

95 the project as social urban rehabilitation, highlighting support for social work. It did not back out of the projects.61

Results

Each project had elements that affected the site’s entire population. For example, at the György-telep (George Colony), stairs that are a main traffic route were renovated, as was the community center. In addition, a playground and basketball court at Hősök tere (Heroes’ Square) were developed, along with a covered waiting facility at the bus stop.

Housing improved for a total of 127 families, which included more than 400 people. In addition, 35 families moved into an integrated environment and 68 apartments within the colony were renovated. Furthermore, 24 families moved to better (though not renovated) apartments within the colony, and 34 apartments were eliminated (by merger or demolition).

Renovations, mergers, and demolitions focused on those parts of the colony where the situation was the most severe. In the Kórház utca (Hospital Street) in Pécsbánya, the homes in the worst condition ceased to exist; others were renovated by installing bathrooms, for example. By merging homes in the crowded György-telep (George Colony), the number of homes was reduced by one-sixth and each apartment was renovated. Buildings of the closed Rücker-akna (Rücker Mine) were demolished.

Renovation, merger, and demolition affected public rental apartments owned by the local government, as well. In addition, minor renovation tasks could be performed by organizing the practical part of construction training and employment programs, such as handyman clubs in the colony’s private homes.

As a result of social work, arrears could be reduced. For this, emerging work opportunities and income support options were consciously utilized. Communities living in the colonies were strengthened and relevant programs were organized—these included cleaning up public spaces to leisure, sports, and cultural events. Community strengthening was most evident in Hősök tere (Heroes’ Square), where residents formed their own association, as well.

Despite the risks, no major conflicts developed out of the relocations. Due to proper preparation, those who moved to an integrated environment were able to gain their new neighbors‘ trust. Local government elections showed that electoral support had not decreased significantly.

Experiences

The most important experience is that with appropriate preparation, housing segregation can be effectively reduced. If city leadership is determined and well prepared, housing integration—on the one hand, improving the situation of those who live in slums, and on the other, moving families to an integrated environment—can be achieved without serious conflicts or the loss of voter support. Very few communities are engaged in efforts aimed at housing integration, and thus have much to learn from

61 See http://www.bama.hu/baranya/kozelet/harmincot-csalad-koltozik-a-pecsi-gettobol-a-komloi-uti-hazakba- 606077.

96 these experiences. Failure to change the situation will cause conflicts that are increasingly difficult to manage.

Another important experience is that investments involving large sums of money must be prepared and accompanied by several years of social and community development work. The “presence“ (“jelenlét“) program of the Maltese Charity Organization provides a complete methodology for preparatory and accompanying social and community development work, which goes beyond the handling of individual and family crises to reinforcing constant communication with people, providing the basic prerequisites of development, building trust, and encouraging long-term thinking. It helps to identify problems and opportunities for improvement, including those that can be implemented without large amounts of investment. It helps to exploit the potential related to developments (that is, the community should feel attached to and maintain completed investments). This was reflected in the stairs renovation at György- telep (George Colony), or in how the most vulnerable were included in job opportunities, which allowed them to move to integrated environments and earn the trust of their new neighbors.

This methodology can also be improved upon. In Pécs, for example, project implementers incorporated the UNDP “coaching“ practice. Regarding the role of coaches, there were several lessons learned: (i) community coaches play an important role in mobilizing the community in addition to supporting the initiation and implementation of activities; and (ii) community coaches need to be gradually phased out while handing over the various initiatives to the community for completion.62 It is also important that coaches keep in contact not only with development beneficiaries but also those who are concerned about changes brought about by the development—for example, those who are concerned about disadvantaged families moving into the neighborhood. By fostering personal or small-group contacts, the mistrust and conflict arising from a lack of information or the spread of misinformation can and should be prevented.

The Pécs example offers a useful lesson to several cities where segregated communities have developed. All of the following are required to implement the experience:

 dedicated and skilled leadership  within the municipal office, an efficient manager who is sensitive to social problems  long-term social and community development work and a presence in segregated communities  at least 1–2 years to prepare investments  resources with which to implement investments

62 See http://localdevelopmentforinclusion.org/assets/-coaching-adventures.pdf.

97 Békéscsaba, a city of cooperation

people living Target group: poor, Roma children women elderly with other disabilities

education Specialization: health care employment housing social services other and training

“Egyedül nem megy” (You can’t make it alone), Békéscsaba

Experiences of the implementation of the LEP in the city of Békéscsaba

Background

Békéscsaba, a city with county rights and a regional center, has about 61,000 inhabitants. It enjoys good railway and road communication with Békéscsaba—City Hall Budapest and Romania. The unemployment rate is Quick facts around 8 percent (2012), and half of the unemployed—some 2,000 people—are out of work District: Békéscsaba for a long time. According to the estimate of the Roma local government, some 2,000–2,500 local County: Békés county inhabitants are of Roma origin. Although there is Region: South Great Plain no coherent segregation in the city (according to the Central Statistical Office’s definition), the Population of the settlement: 61,325 majority of Roma live in isolated blocks in degraded Objective: To improve inhabitants’ quality of life; or degrading parts of the city. Most are to create an attractive living space and a secure unemployed. social environment in which the family, as a The city’s social and economic environment is in molecular social community, is able to convey constant flux. The local municipality is continually values that will help develop strong bonding to faced with challenges related to the increasingly Békéscsaba and promote progressive development higher need for infrastructural, social, educational, What is the most important experience? and cultural services brought about by changes in Operational partnerships that focus on developing citizens’ demographics. Thanks to earlier planning and implementing relevant interventions. processes, Békéscsaba has a long tradition of cooperation between various sectors and their For what settlements can the experiences be

98 many constituents, which also reflects the city’s useful? Those in which the resources of the civil realization that interventions in different areas sphere can be mobilized. impact the entire system. Who can be contacted for further information? In addition to continuous and broad dialogue, the Mrs. Uhrin Nándorné, deputy head of department, zero-HUF projects also play an important role in group leader the implementation of the LEP; these interventions build on existing civil and municipality resources, capacities, commitment, and ideas and involve hardly any EU or municipality funding. The third pillar of the LEP implementation is the development policy resources (received so far and expected to be received). Between 2009 and the 2015 the value of EU projects directly and indirectly promoting equal opportunities was 4.5 billion HUF. In addition, the city also implemented about 10 billion HUF worth of infrastructure development projects (the city’s annual budget is approximately 14 billion HUF).

Activities

Settlement leaders soon realized that the city would not be able to solve all of its problems arising from its statutory obligations or those indicated by its citizens, however justified and legitimate they were. So it opened toward the civil sphere in several areas. It supports the realization of their objectives and helps their operation. The initial ad hoc form of subsidization has been eliminated. Now, the supports granted to organizations are structured and systematic, and are granted by the same criteria and for the same period of time. In the field of personal care the municipality has made agreements with six civil organizations for three years, and this ensures that all of the municipality’s compulsory tasks are tended to. In addition, other civil organizations promote the implementation of the LEP or are members of the LEP Forum. Their activities are directly linked to a target group (for example, the City Seniors’ Association). Several such civil organizations presented here are county-reach organizations and have their seat in Békéscsaba. They wield considerable lobbying power and are very good at “making their voice heard” (for example, the Békés County Association of the Blind; the Békés County Association of the Deaf and Hearing Impaired; and the Békés County Women’s Association).

Experiences

The LEP of Békéscsaba City of County Rights essentially rests on two pillars:

1. It emphasized the term “local” and tried to explore possible areas of intervention that had zero budget involvement. A zero-HUF project does not require any EU funding and does not involve any budget spending on the part of the municipality for the term of LEP implementation. Rather, it relies on the skills and knowledge of the local craftsmen and experts, and involves the stakeholders of the

99 local civil sphere; in this way, it has a large human resource requirement. A brainstorming group was convened to study what was possible—in addition to the existing and well-operating systems—for equal opportunity and innovative, nontypical yet efficient improvements.

Despite the fact that the majority of the LEP projects are zero-HUF, implementation is running enthusiastically and smoothly. Each and every participant feels they are getting something different, something extra, which breaks up everyday monotony and rather quickly produces measurable results and feedback for those involved in implementation. These include, for example, editing and distributing information and awareness-raising publications (in the fields of abuse, disabled care) and organizing various courses (on lifestyle counseling or housekeeping assistance for people living in deep poverty). In the field of child protection, information and professional dialogue about issues of threat and abuse have helped improve access to care. The improvement of prenatal care also serves the aim of reducing the number of children born with a permanent defect. The 60+ information clubs help combat the isolation of the elderly.

2. The second group includes developments that require funding. In May 2015, the Municipality Assembly of the City of Békéscsaba with Country Rights adopted the document called “Integrated Area Program of the City of Békéscsaba with Country Rights 2014–2020.” This improves quality of life in the city and increases the city’s population attraction and retention powers. The investments make services more available, increase social security, and help develop a more health-conscious society. The investments aimed at increasing the capacities and improving the quality of the crèches and kindergartens get strong priority because of their impact on employment. The social and healthcare services fill the most acute gaps within the given frameworks.

The complex development of the city’s public services can be financed from the Transport Operational Program (TOP), the Human Resources Operational Program (HROP), and sectoral OPs, which can help the implementation of a modern, high-quality public services system that will meet contemporary expectations. Making public buildings wheelchair accessible is an important condition of realizing a more integrated society. Before making any alterations for disabled access, we followed the established practice of consulting the local members of the affected target group, and consultation with them is ongoing.

In the past years only some of the social housing facilities were renovated under the framework of public work. Since this activity can be pursued regardless of the weather and requires and deepens professional skills, these projects also help the participants find employment in the primary labor market and continue the trade for regular pay.

Experiences

In the course of implementing the actions and proposals in the LEP, all stakeholders—the citizens of Békéscsaba, the municipality, the people working in the institutions, and in the office focusing on the affected target group—could experience and realize the importance of the dialogue. Good decisions can become even better if the opinion of the group affected by the problem is also articulated.

100 Joint implementation that rested on communication and dialogue helped reach those citizens who are familiar with the difficulties of one or the other specific social group; have good lobbying power; and, with their active and helpful attitude, are able to help solve certain problems.

The LEP programs promote social integration, support participation in public affairs, develop activities for constructive leisure time activities, and/or identify gaps in the availability of such activities. Participants’ connection networks will expand; isolation and solitude can decrease; and feelings of uselessness can dissipate. Quality content can make citizens’ lives more meaningful and help them feel optimistic about the future.

Bonding with the city will increase in programs’ implementation. Loyalty will deepen, and indirectly increase the city’s population retention power and even reduce migration.

Attention to the issues raised in the LEP will stimulate discussion, shape people’s views, and may even change their attitude toward a given issue. The opinion of all stakeholders involved in LEP implementation changed in a positive direction (there were no disputes over why a program or intervention was needed). By implementing the LEP, local society becomes stronger and more united. Solidarity grows. Disadvantaged groups are treated more equally and have more opportunity to access public services.

101 The thoughtful town: Jászfényszaru

people living Target group: poor, Roma children women elderly with other disabilities

other: education social Specialization: health care employment housing and training services community development

Jászfényszaru—A Thoughtful Town

Demand-driven town development in Jászfényszaru

Background

Jászfényszaru is a small town located at the Quick facts intersection of three adjacent counties. It has a population of more than 5,000. The town’s main Disctrict: Jászberény profile is agricultural production, which has been accompanied by strong industrialization since the County: Jász-Nagykun-Szolnok collapse of the Communist regime. It is one of the hubs of Samsung television manufacturing in Region: Northern Great Plain Hungary. The Roma make up approximately 20 percent of Population: Central Statistical Office (CSO), 2011: the local population, the majority of whom live in 5,724 (population); 5,680 (usually resident the two segregated areas. In recent years the town population) has undergone continued development resulting in an upgrade of its infrastructure in the central as Objective: The complex development of residents well as in the segregated areas. Along with in segregated areas by implementing social, investment in infrastructure, human development educational, employment, health care, and has also come to the fore; the complex settlement community development–related program program launched on July 1, 2013, was one of its elements greatest undertakings. Initiatives to support low status groups are not Period of implementation: 2013–2015 new: The town had offered social and training programs and encouraged infrastructure Amount and type of funds used: (TÁMOP 5.3.6- development before. Among these, social urban 11/1-2012): 148,966,204 HUF. regeneration had a great impact on the segregated areas. The once muddy and then contaminated Before the launch of the complex settlement area was completely renovated and now houses a program, the town applied for and was granted one-hectare outdoor leisure park in the middle of the segregated area at Szegfű Street. funds earmarked for human and infrastructure Since 2008 the development policy adopted by development to finance the makeover of the town

102 Jászfényszaru has increasingly emphasized center (476,761,370 HUF) and the social equality. The local authority and the external rehabilitation of the segregated areas (347,229,783 equality expert have both played a key role in HUF), to mention the two most important formulating the strategies. The Türr István Training infrastructure projects. and Research Institute (as consortium partner) and the Hungarian International Children’s Safety During program planning it became evident that Service (as implementing partner) are both project elements and the various development actively involved in implementing the complex settlement program. concepts needed to be built on one another. The success of a project depends greatly on how well the local authority’s available resources and development concepts (social cooperatives, communal work programs, development of the local economy) match the project objectives.

For what settlements can the experiences be useful? The experiences are useful for municipalities with innovative ideas about municipal development and a willingness to apply for funds, where the complex approach reflected in the application can be exploited.

Who can be contacted for further information? Dr. Márta Győri-Czeglédi, mayor; Péter Csaba Kocsis, project manager, expert

Activities The town is clearly divided into a lower and upper end. The eastern quarter includes the town’s segregated areas. In 2001 primary school was the highest completed level of education for 55 percent of the residents in this quarter, and this figure was 36 percent in 2011. Of the two segregated areas, one is located at Szegfű Street and has a longer history than the other (according to the 2011 census, 215 people live here). The other is situated at Bajza Street and was developed concurrently with the gradual settlement of residents (according to 2011 data, 113 people live here). The latter is typically the home of Wallachian Roma, while Hungarian or so-called musician Roma live in the older area. According to CSO data from 2011, a total of 445 Roma live in the town. In contrast, estimates suggest a much larger population: the number of Roma is estimated at 1,100–1,200, of whom around 300 are Wallachian Roma. The complex settlement program was designed to address multiple problems in the segregated areas. It aimed to raise the level of education and improve employment opportunities through program elements related to health care, social, and community development. Needs were assessed in two main ways: (i) by summarizing municipal development concepts, human development concepts, and taking stock of experiences gained in that context so far—for example, to create a community space capable of operating as a multifunctional space; and (ii) by directly assessing target group needs using focus group discussions to identify the most pressing ones, which were then mapped together with the level of education and training as well as employment experiences.

103 Areas of activity Program

Social and child welfare Local History Club, Szarui Tálentum, a talent scouting and nurturing program, services, community Film Society, Family Day, Sports Day, indoor play center, public agenda and development individual responsibility, Future Planning Team

United for the New Kindergarten, English language sessions, SEN prevention Education services consulting, early childhood screening program

Lifestyle Days I (screening of 0–18-year-olds), Lifestyle Days II (screening of Healthcare services 18-year-olds and above), Te, a házban performance group, Gastro Club, Do- It-Yourself Club, 3N—lecture on prevention

Digital literacy training, shelter belts—energy forest planter and caretaker, Adult education and maintenance worker, kitchen attendant, development of traffic and training transport competences—paving worker, waste selection and treatment training, career orientation training, Doing business effectively training

Promoting employment IT Club, Job Seeking Club, Working Again! workshop

The development program is target group–oriented: its programs sought to reach each member of the family, providing an opportunity to exchange experiences between the various program elements. Difficulties and how they were addressed The implementation of subactivities needed rescheduling. One reason was that more than a year had passed between planning and implementation, and there were problems from other engagements that emerged in the meantime, including overlaps with other programs. It became clear during implementation that children living in the segregated areas would not be able to attend the summer camps, and that summer activities had to be arranged. The program period covered two summer seasons. By redesigning and compressing the programs, children could be supervised from morning till evening for two periods of one month and engage in nonformal skills and community development sessions. After the program launch it became increasingly evident that the indicators set for the program could not be achieved if target group members participated in other central programs, so the families concerned had to be consulted on an ongoing basis to find out which solutions suited them and were most beneficial. Several minor and petty problems emerged during implementation, but these were considered to be a natural part of the process and were handled accordingly by colleagues and management. One area that deserves mention is how training attendance was facilitated and how dropouts were minimized. A “call tree” was set up to almost immediately discover absentees, notify training providers, and ensure the necessary documentation for continued training attendance. The fluctuation of social workers represented another problem. Social workers were present at all times during the program; nonetheless, staff fluctuation was a real problem, so devised three mechanisms were devised to cope with it. First, a cooperation agreement was negotiated with the local care center that had appropriately qualified experts who fulfilled the requirements set out in the application guide. Second, experts who had previously applied for the vacancies posted when a social worker could not continue in the program were reinterviewed. Third, in addition to the social workers, the specialists of

104 the Teahouse—a communal building for trainings and community events—also gathered information about target group members to avoid any hitches in the individual development process when a social worker was replaced. Results The program was successful, as we managed to engage the entire target group. More than 60 people attended the training courses and 28 found employment (some of them in municipal communal work). Besides the program’s mandatory indicators, the community development work undertaken is also of great significance, though its results are difficult to quantify. The stereotypical prejudices of the non- Roma society (such as thinking that Roma do not study, do not like to work, and so on) were one by one broken down during the program, as one of the most important activities was to promote employment in cooperation with the local government’s competent officials. The Teahouse programs were accessible to all residents of the town, and as it turned out, many who did not belong to the target group were also happy to use the services (such as learning useful skills during the IT Club, job searching, writing a CV, and so on). Children’s behaviors also visibly changed, impacted by the friendly community space. In addition, the presence of young and devoted colleagues strengthened ties and shaped patterns of everyday behavior. During implementation, we managed to involve a number of local young Roma who contributed either as a volunteer or a colleague. Hopefully their activity can continue in the maintenance period as well. Local government capacities have definitely improved during the program. Municipal services became available that are helpful for families, local kindergarten teachers, and school teachers alike (such as SEN consultations, prevention programs, and so on). The equipment and community house will remain available for future use and can help realize the town’s human development concepts. The work that became “institutionalized” under the Teahouse program is expected to bring about a positive change in the attitude of local workers. In many cases, market actors seek to recruit employees by contacting the local government and the Teahouse, and the activities undertaken in the Teahouse are regularly covered in the local paper Mi újság Fényszarun (“What news from Fényszaru”). Feedback from local teachers suggests that professionals involved in implementation acquired new expertise and a new attitude that positively informs their work. Young people engaged in the program could join other EU and Hungarian– American programs. Despite a strong focus on the program’s community development–related goals, there is not yet an active community within the target group that could constantly formulate and communicate needs to decision makers. The program was met with mixed reactions. The target group was naturally enthusiastic that a program to make their life easier was to be implemented, but the town’s originally favorable reception has gradually abated. The program and the community house were soon labeled “Gipsy program” and “Gipsy house,” respectively. Continuous information could trigger a change in this attitude, as there were several programs that many outside of the target group attended, and they were left with positive impressions. “We cannot give you bread, but we can give you advice.” This was once said by a Csángó from Gyimes when asked about the success of the evolving community there. We do believe that this is exactly what makes these programs important: to offer opportunities and alternatives that, besides providing basic services, can create active communities of citizens.

105 Alsómocsolád, a village of entrepreneurs

people living poor, Roma children women elderly with other Target group: disabilities

other: education social Specialization: health care employment housing management and training services capacity

Alsómocsolád, an Entrepreneur Village

How did a small village build internal project management capacity and how did the broader region benefit from it?

Background

Alsómocsolád is a cul-de-sac settlement with a Quick facts population of around 350. It is in the northern corner of Baranya County and in the Hegyhát Region: South Transdanubia, Baranya County, region that is among the country’s most Hegyhát district disadvantaged regions. Population of the settlement: 350 The settlement’s biggest problem is its dwindling Objective: To increase population retention and aging population, and the migration of its capacity with targeted development young people to places with better prospects. Period of implementation: From 2010 Alsómocsolád has a better employment situation than the other settlements in the region, thanks to Amount and type of funds used: ESF: 210 million the four large companies that operate there HUF (SROP 5.1.1, 5.1.3) (including the Pick Szeged Zrt. plant that employs over 400 people, though only 14 people from the What are the two most important experiences? village) as well as the 26 microenterprises. At Once we succeed in involving development present, the number of the registered jobseekers resources, the projects will make it possible to is 16, but the rate of population decrease is similar gradually build up a team that will provide targeted to that of the other settlements. assistance to people living in deep poverty and to the region’s other settlements. In the past twenty years Alsómocsolád has consciously sought development opportunities: For what settlements can the experiences be useful? Those with relatively favorable conditions in 1. It built public utilities, such as piped water,

106 telephone, gas (by the mid-1990s), then the disadvantaged regions. sewerage and broadband Internet by the Who can be contacted for further information? middle of the 2000s. Dicső László, mayor; Mrs. Halmai Gáborné, 2. It created new community services, including a technical leader village warden, a telehouse, a village house, and a senior living facility.

3. It renovated public squares and places, including the main square, the church, and the market.

The village used EU funds (Phare) to finance these projects before the accession.

Initially, the young and ambitious mayor, Dicső László, was responsible for securing funding for the activities. Once 2–3 projects were launched and 50–100 million HUF in development funds were received each year, a dedicated team was set up to manage the projects.

The village also needed substantial loans for co- financing and to cover noneligible costs, so it amassed a rather sizeable debt. In 2012 the state also took over that debt from Alsómocsolád.

The increased project management capacity of the village started to benefit the whole microregion, particularly from 2008 onwards under the framework of the program for the most disadvantaged microregions.

Activities

In 2008 the LHH program, which was designed for the most disadvantaged microregions, made it possible for the Sásd microregion to determine their most important development objectives using a total budget of nearly 2 billion HUF. The planning process highlighted striking differences between the planning and implementation capacities of Alsómocsolád and the other settlements of the region.

It was therefore decided that a small part—about 2.5 percent of the fund—would be allocated to establish a project office in Alsómocsolád to provide management services for the region’s other settlements, and promote the integration of disadvantaged groups by building partnerships and generating and preparing projects. The project office promoted both the implementation of the projects

107 selected under the LHH program and the involvement of additional resources. The LHH program (SROP: in Hungarian: TÁMOP 5.1.1, 46.2 million HUF) financed the project office’s operation from early 2010 till the end of 2011. The office continues to operate with a staff of two employees and five trainees.

For additional resources to meet the project office’s objectives, the “Community inclusion for the integration of people living in deep poverty” application program offered excellent possibility. This program combined social work with community development and regional development. The program financed the project, called “Establishment of a regional family-centred community network (Köz-Tér- Háló),” from early 2012 until the end of 2014 (SROP 5.1.3, 164.4 million HUF).

The project covered 10 settlements of the Sásd microregion (Alsómocsolád, Ág, Bikal, Gerényes, Kisvaszar, Mekényes, Nagyhajmás, Szágy, Tormás, Varga) and one settlement in the neighboring Dombóvár microregion (Döbrököz). The total population of these 11 settlements is around 5,000.

The primary aim of the project was to help families living in deep poverty and deprivation. It helped reduce their dependence on cash benefits and enabled them to develop medium-term socioeconomic plans.

The project’s main activities were as follows:

 establish four “houses of practical skills;” organize community events and provide everyday domestic services (such as washing, ironing);

 organize competence development training to develop the basic competences of housekeeping and gardening, and to jointly practice the skills learned (such as house renovation, production of cake coal for heating);

 establish and operate a new type of social service—the family mentor;

 prepare the specialists and village leaders to understand and alleviate the situation of families living in poverty (by hosting workshops, clubs).

Results

The first result to mention is the project’s preparation and implementation, which the region could not have accomplished without the project management capacity of Alsómocsolád. They not only implemented the project, but implemented it in such a way that ensured the thorough local knowledge and professional skills of the mentors, and connected with other activities underway in the region. Because of this, the project stood out among the others supported under the program that used external management capacities (application writing companies).

Some 150 families regularly benefited from the project’s services. But the number of those who received ad hoc assistance was more than three times higher. Some of the families became capable of formulating and following longer-term objectives.

108 More than 30 professionals and village leaders regularly took part in the training activities. The number of the ad hoc participants was three times that figure.

Experiences

The example of Alsómocsolád proves that successfully involving development resources makes it possible to gradually build up a team, which will provide targeted assistance to people living in deep poverty and to other settlements of a region. Internal project management capacity not only makes it possible to procure more development resources, but the funds can also be used more efficiently.

109 Annex II. RAS implementation roadmap—consultations and field visits

On April 13, 2015, the team participated in a technical workshop led by the Ministry of Human Capacities (MHC) team for government agencies involved in the implementation framework of the National Social Inclusion Strategy (NSIS): MHC, TKKI, the Hungarian Central Statistical Office (HCSO), the MfNE, the MoI, and Lechner Lajos Knowledge Center (LLTK). It conducted further follow-up discussions with MHC, MoI, LLTK, and TKKI counterparts on April 14 and 16. The discussions covered collaboration and knowledge-sharing arrangements under the various RAS activities, and synergies between existing institutional and procedural arrangements and information system architecture and RAS deliverables.

On April 15, the team visited local social inclusion projects in Pécs and Gyulaj, and conducted discussions with municipal and civil society stakeholders on the key lessons learned regarding project development, implementation, and follow-up. In sum, lessons indicated that key factors to project implementation are (i) sequencing project activities (soft measures need to be implemented first, with a view toward enabling the community to participate in project planning); (ii) clearly delineating responsibilities among local-level actors; (iii) leveraging local civil society partnerships; and (iv) articulating the need for well-structured follow-up activities with the community after the project closes. On April 17, the team conducted further discussions with the MHC and MfNE teams, and identified the lack of involvement by the Prime Minister’s Office (which houses data and information about European projects and has not attended the opening workshop) as a high risk to successful project implementation.

Between May 26 and May 30, the team conducted additional technical discussions with MHC, TKKI, and HCSO to further refine the scope and content of the deliverables under this activity. The World Bank team also visited the municipalities of Békéscsaba, Győr, and Jászfényszaru, as well as the Roma mission of the Hungarian Pentecostal Church in Békés. During the visits the team held discussions with a broad set of local stakeholders regarding their experiences with planning and implementing social inclusion interventions. The meetings focused in particular on the local social inclusion planning framework—that is, the development of LEPs. Additionally, the team led a workshop in Sárkeresztúr that brought together mayors, managers, and beneficiaries of social inclusion projects from 12 rural municipalities in Hungary. The focus of the workshop was to exchange views on challenges and opportunities, with the development and implementation of social inclusion interventions targeting Hungary’s most marginalized groups.

At these meetings and during the workshop discussion, a number of key challenges were identified, in particular: (i) the structure, process, budget, and implementation framework that have been developed to plan and implement LEPs are currently not sufficient to enable municipalities to effectively deliver relevant social inclusion activities; (ii) municipalities face

110 particular challenges in adequately addressing the multidimensional exclusion challenges by the most marginalized groups; (iii) public works programs are widely used in lieu of more targeted activation programs, and often substitute for local basic services—hence not only do they fail to create pathways to integrate the unemployed into the first labor market, but they also lead municipalities to become dependent on such programs; (iv) budget sources (mostly EU funding) are usually allocated on a project basis, therefore municipalities struggle with medium-to long- term planning, implementation, and M&E of social inclusion measures; and (v) even though lack of adequate budget is a key concern for most municipalities, the implementation of the LEPs and OPs for EU funding are not yet sufficiently linked.

In response to the issues identified during the field visits, the team agreed with MHC and TKKI that the deliverables will focus on effective support for implementing and monitoring the LEPs. The deliverables will particularly emphasize practicality—that is, provide step-by-step guidance for stakeholders who are planning and developing projects that can address the challenges faced by the most marginalized groups. The World Bank team has prepared annotated outlines of the relevant deliverables and shared those with MHC for feedback and inputs.

On June 3 the team joined a dissemination workshop on the Handbook for Improving the Living Conditions of Roma, held at the office of the European Commission in Budapest. The goal was to take advantage of inputs from approximately 40 participants who attended the event, including representatives from local authorities, CSOs, and relevant institutions of the national government. During the event, the objectives and a summary of key elements of the handbook were presented. Representatives from MHC and TKKI provided remarks on the relevance and applicability of the handbook in the Hungarian context. MfNE has also given a presentation on funding opportunities under the 2014–2020 EU programming period. This was followed by a discussion with all participants about the handbook’s applicability, along with presentations of relevant experiences by some local authorities.

On June 15, the team conducted discussions with DG Employment, DG Justice, and DG Regio to introduce the scope of the ongoing activities and gather feedback. Comments focused on (i) the need to closely align the planning and implementation framework with the upcoming structural changes in OP implementation (in particular, the Territorial Integration OP organized at the level of counties and cities with county rights); (ii) discussions facilitated by the EC, its outcomes, and related resources on the role of social economy in activation and social inclusion of poor and disadvantaged groups; and (iii) joint opportunities to disseminate the findings of this RAS to further EC audiences and country experts.

On July 21, the country manager for Hungary and the RAS team conducted another field visit to Pécs so as to carry out consultations with the deputy mayor, the municipality social policy expert, the managing director of the Maltese Charity Organization, and the local staffs of TKKI.

111 The discussion focused on the city’s experience in developing and implementing social rehabilitation projects in the 2007–2013 period to address poverty and marginalization in eight segregated communities located in Pécs’s Eastern District that are broadly considered to be successful (EU-funded) local social inclusion initiatives. The most important takeaways from these projects are: (i) local partnerships are key; such complex interventions require a strong, committed, and well-coordinated team of the municipality, local civil society, and TKKI; (ii) activity sequencing is also essential, in that infrastructure development needs to be preceded by intensive family-level social work and community development; (iii) cross-cutting efforts; the project should be leveraged toward reaching the community through a multipronged approach ranging from skills and employability (for example, utilizing training opportunities offered by TKKI and public works funds) to education and health (for example, enabling local actors to provide after-school activities and information seminars on maternal and child health in the local community center); and (iv) following up with and tracking clients; it is very important that, as a follow-up to resettlement interventions, client families continue to receive social work so as to help them and their neighbors adjust to the new environment. The municipality has expressed commitment to continuing the social rehabilitation projects during the 2014– 2020 period, and has earmarked approximately 600 million HUF (approximately €1.95 million) for this purpose. The city’s most prominent challenge in this forthcoming period is the social rehabilitation of the István-akna settlement of approximately 250 poor, marginalized, and heavily indebted individuals who had recently relocated to the city’s margin, creating an extremely poor and unsafe neighborhood. Any investments in this settlement will likely require a lengthy period of intensive social work and community mobilization. Following these discussions the team visited the project locations where the social rehabilitation projects are about to close (György-telep, Hősök tere) or are ongoing (Pécsbánya, Somogy-bánya) and conducted discussions with field workers and project beneficiaries about their experience. The team also visited a day care center of adults with mental disabilities run by the Maltese Charity Organization.

On July 22 the country manager led consultations with the Deputy State Secretary for Social Inclusion at the Ministry of Human Resources. Following an update on the status of RAS deliverables, the deputy state secretary informed the team about forthcoming priorities under the NSIS’s Implementation Plan (fostering entrepreneurship of Roma professionals, facilitating after-school programs in marginalized communities, enhancing the labor market integration of young Roma females) as well as further upcoming initiatives in education supported by the state secretariat (for example, involving corporate actors in the development of innovative education approaches to support skills acquisition among marginalized children).

On July 22 the team conducted consultations at a technical workshop with civil society social inclusion experts in Budapest. The workshop discussed opportunities to improve the national

112 and local institutional setting for developing social inclusion projects at the local level. Workshop participants called for improving the alignment of relevant sectoral strategies with the strategic framework for equal opportunity, and raised concerns about budgetary incentives at the local municipality level. The workshop also identified concrete inputs and contributions for one of the RAS deliverables; a handbook of social inclusion programs was developed for the local level. The team also discussed possibilities for developing M&E of social inclusion interventions at the microregional and local levels.

In the course of August, the team conducted further field visits in rural localities in Alsómocsolád, Ács, Porcsalma, and Szatmárcseke, as well as in the town of Tatabánya. It also consulted with local municipality and civil society stakeholders to learn from local implementation experiences (the lessons of these visits are reflected in the case studies developed as part of this study). The team continued the technical dialogue with MHC and MfNE counterparts throughout August and September. The team is planning to conduct further consultations with a group of mayors to “test” and collect feedback on the accompanying handbook.

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