Today’s referendum result is likely to have far reaching implications – for the economy, for employment levels and, as a consequence, for the employment support sector. Many of these implications are hard to predict. However, I wanted to share with you our understanding at this point in time.
Many of you hold DWP contracts or hope to hold DWP contracts. We have been in contact with the DWP and asked that a statement is put out to the sector. We are aware that it will take time to work through the implications of the vote with HM Treasury and the Cabinet Office.
Our understanding is that the DWP element of the Work and Health Programme procurement is not affected by the decision. However, what is now uncertain is the extent to which additional ESF monies can be committed to the contracts at combined authority level.
Many organisations are bidding for ESF contracts at the moment. It is uncertain how long negotiation of withdrawal from the European Union will take. The speculation is that this will be a minimum of two years from the triggering of Article 50. This could well mean that ESF monies are likely to be safe until 2018 as a result. However, there will need to be confirmation of this from HM Treasury before new ESF contracts can be let.
The situation is different for contracts which are already let. The Big Lottery Fund, for instance, has today put out this statement on the Building Better Opportunities programme:
"Building Better Opportunities is jointly funded by the Big Lottery Fund and the European Social Fund. The Big Lottery Fund remains committed to the Building Better Opportunities programme until delivery is complete in 2020. We look forward to working with grant holders on local projects that will tackle poverty and promote social inclusion”
There are also, as we know, political implications. Although we expect the big policy drivers in our world (the aim of halving the disability employment gap for instance and a focus on youth unemployment) to remain in place, clearly the change in Prime Minister will lead to a number of unknowns. We will keep all ERSA members briefed on developments.
Finally, ERSA’s job is to make the case for social spending on programmes which reduce unemployment amongst today’s and tomorrow’s jobseekers, regardless of membership of the European Union. We do not know what will happen to unemployment in the short, medium or longer term, but we do know that the government, in a post EU world, will want to keep unemployment in check and that our programmes are a key component in delivering this.
Our strong push will therefore be twofold – first, to ensure that expected procurements take place as soon as practicable; and second, to work with partners, including local authorities, LEPs and other agencies, to make sure that monies that are lost to social spending through the end of structural funds in the longer term are replaced through other means.