"Zero unemployment territory": a useful but costly system, according to the Court of Auditors

The "Zero Long-Term Unemployment Territory" (TZCLD) experiment "has proven its usefulness locally" , but the system is costly and if it is to be made permanent, its management must return to common law, the Court of Auditors believes in a report published on Thursday, June 19.

Established by law in 2016, this experiment, which is based on the idea that "no one is unemployable" , allows voluntary territories "of 5 to 10,000 inhabitants" to create "employment-oriented businesses" (EBE), which recruit people on permanent contracts who have been permanently out of employment, the Sages recall.

It was extended in 2020 and is due to end on 30 June 2026. Parliament must decide on its fate before this deadline. In the meantime, the Court has decided to look into this "singular object" which, at the end of 2024, concerned 83 territories , with 86 EBE and "3,290 employees resulting from long-term job loss" .

Initially, the idea of ​​the initiators of the experiment was that the money raised was equivalent to the overall cost of unemployment support, estimated at €18,000 per person per year. But, the Court emphasizes, "this estimate was refuted" by an official report in 2019. The Sages point out that the experiment requires "significant resources, both human and financial."

They note a "clear" financial imbalance, with expenditure of 57.1 million euros in 2024 for the State (compared to 5.8 million in 2017) and 7.5 million for the departments.

"The amount of public funding in 2023, compared to the number of employees benefiting from the experiment in full-time equivalent (FTE), shows an annual cost of €28,000 per FTE," the report observes. This is more than other integration schemes such as adapted companies (€18,000) or integration companies (€12,000).

The Sages also point to "atypical governance" . The piloting of the experiment has been entrusted to an association which manages the territorial experimental fund against long-term unemployment (ETCLD), the monitoring of which by the State administrations is carried out "at a minimum" .

The Court also considers that "it is necessary to put an end to the management of public funds concerned by an association" and wishes "that the approach be part of common law policies in favor of employment" . Among its recommendations is also the need to evaluate the cost of long-term unemployment "to set the amount of the State contribution" .