The reform of active employment policies in 2023 was the Government’s major gamble Strengthening the role of public services in finding employment for the unemployed. But a year and a half after the Labor Law came into force, disappointment with its invisible results for the unemployed has only grown. In particular, it is doubtful that no progress has been made in transforming the SEPE into a new Spanish Employment Agency. So far, the government has dispelled these doubts.Given the complexity of developing the measures, which involves the autonomous communities. But things will change with the analysis of the Bank of Spain, which in the coming monthswill give its verdict on the keeping of promises.
This review is all the more important as it will be carried out under the mandate of Jose Luis Escrivá. While we wait to see the new organizational chart of the Bank of Spain, no one doubts that one of the priorities of the new governor will be to promote the role of the entity’s research department as analyst of major economic policy issues. Home professionals highlight one of their main concerns: the modernization of active labor market policies, which includes the latest, still incomplete, reform of the system. public employment services. An economic aspect for which the new governor has already shown his concern in the past and expressed it in official reports.
Those who know Escrivá and the functioning of the Bank remember that the supposed margin to “control” the analytical work included in the annual reports or bulletins is limited and, in fact, they doubt that this is his intention. On the contrary, the bet is in line with his long professional career and what he has already done during his time at the head of the Independent Authority for Fiscal Responsibility (AIReF)an organisation that has already looked at the effectiveness of public employment services.
Although labor law has already been analyzed by private research services, such as Fedeathe weight of a critical analysis of the Bank of Spain It would be difficult for the government to ignore. Especially if we agree with the experts who consider that the problems detected by AIReF in 2019 remain largely uncorrectedAt this point, it should be recalled that this analysis is considered the starting point for the SEPE reform of 2023.
The role of Escrivá and AIReF
Unlike other issues, such as pension reform, while he was a minister in Pedro Sánchez’s government, Escrivá was not the political leader in this area. That role falls to the current Second Vice President and Minister of Labor, Yolanda Díaz. He was therefore not in charge of carrying out this reform, although many consider him, indirectly, as his “ideologue”.
They point out that the analysis of spending on active policies carried out during his presidency of AIReF, in 2019 (one of his last major reports on the control of public spending before being convened by Pedro Sánchez) was precisely the one that the government would use as a ‘model’. designing the modernization of active policies that it committed to Brussels in 2021 as part of the Recovery, Transformation and Resilience Plan.
This report, technically a “spending review” on the effectiveness of public spending in these areas (estimated at around 6.5 billion euros), included many criticisms of the management of regional services and the SEPE. Thus, it censured the opacity of data from the State and the autonomous communities to evaluate the results of their actions.
But it also included proposals for improvement, such as the need to “implement profiling tools and proposals for appropriate routes” for the unemployed, with the ultimate aim of providing the most appropriate service and ensuring “a real connection between supply and demand for employment.” The former minister’s entourage suggests that Escrivá then signed, very convinced, this report that reflects the “disaster” of active employment policies.
A failed reform
The proposal presented two years later in Brussels claimed to follow the line suggested by AIReF, through the new Spanish Employment Activation Strategy 2021-2024 and the Employment Law that came into force in March 2023. A standard that was structured around the transformation of the SEPE. in a Spanish employment agency.
The transition, which was scheduled for a period of six months, responded to Escrivá’s proposal to strengthen its role as coordinator of job search strategies for the unemployed instead of simply managing benefits and subsidies (the famous passive policies). It is for this reason that this package of measures received the approval of Brussels, who authorized the payment of the portion of the funds linked to compliance with commitments.
Yet 18 months later, there has been no news from the Agency. The delay was initially blamed on the election calendar, but after the formation of the new coalition government, with the same team at the head of the Labour Party, There is total silence on the body called upon to succeed the SEPE.
The rest of the measures aimed at improving assistance to the unemployed through a new common portfolio of services of the national employment system, personalized itineraries and the mobilization of professional advisors, yielding results in improving the efficiency of public services that only participate in 3% of placements, according to Fedea estimates. Added to this is the slow pace of developments (some are still in the project phase).
Experts consider that the lack of results is due to the fact that the reform was driven by the bureaucratic drifts of the national employment system to finally maintain the same “status quo”, which received 6.4 billion in 2024. In this sense, the problem is not so much the text of the labor law as the lack of will (and technical and legislative tools) to implement it. A situation on which the communities themselves are tiptoeing, despite the majority of PP executives present at the Sectoral Employment Conference where this money is distributed.
The role of the Bank of Spain
So far, the Bank of Spain’s assessment of the reform has been cautious, although for different reasons. In the annual report corresponding to 2023, published last April, it highlighted the low effectiveness of employment policies in Spain, but stressed that it was still too early to assess whether the Labor Law and the transformation of the SEPE into an Agency “will allow us to remedy the deficiencies that these policies have consistently presented over the past decades.“.
That is to say, the supervisor already has this reform at the centre of his concerns, since he was trying to make a “comprehensive review of employment policies” a “priority”. Moreover, he does so with points of view similar to those of the AIReF report promoted by his new governor. This is, they point out, an extremely relevant issue in the labour market, where the unemployment rate is the highest in the EU. but in which the confidence of the employment services is negative.
The fact that Escrivá was not responsible, as a minister, for the implementation of these reforms gives additional support to analyze their future and whether European commitments are being met. This avoids the political suspicion that will accompany the analyses on pensions.
Now the question is whether we will have to wait for the annual report, which will not be published until late in 2025, to know the verdict of the Bank of Spain, or whether it will be announced in a specific report. This depends on the changes in the operation of the research department, which are expected in the house. as a strengthening of its presence in the economic debate. In any case, they emphasize that it is not so much about “advising” the government as about increasing the volume of analysis and information available not only for Moncloa, but for Spanish society as a whole. It will be up to the Executive to decide whether or not to take this into account..
